Hana Financial seen to extend deal to buy KEB

SEOUL, May 20 (Yonhap) -- Hana Financial Group Inc. is likely to extend its deal with U.S. buyout fund Lone Star Funds to buy a controlling stake in Korea Exchange Bank (KEB), sources said Friday.
Hana Financial Group, South Korea's No. 4 banking group, clinched a deal to buy a 51.02 percent stake in KEB, the fifth-largest lender in the country, for 4.69 trillion won (US$4.33 billion) in November.
But South Korea's financial regulator said last week it will delay its decision on Lone Star Funds' eligibility as the top shareholder of KEB, raising speculation that the deal, which could be the biggest bank takeover this year, might break up.
Hana Financial held a hastily arranged board meeting earlier in the day where its chairman, Kim Seung-yu, discussed an extension of the KEB deal with board members, sources said. Kim flew to Japan on Wednesday to meet officials from Lone Star to discuss the issue.
"We exchanged views about the extension of the contract. But to finalize the issue, approval from the board is required after the two parties agreed to extend it," an official at the group said.
Under the deal, either party could walk away from the deal if Hana Financial does not receive regulatory approval by May 24.
Market watchers speculate that Hana Financial and Lone Star are expected to consult with the extension of the deal beyond the deadline.
The delay in the Financial Services Commission's deliberation came as the Supreme Court overturned a lower court's ruling in March, convicting a former executive of the Korean unit of Lone Star.
sooyeon@yna.co.kr