ID :
18822
Wed, 09/10/2008 - 16:13
Auther :
Shortlink :
https://oananews.org//node/18822
The shortlink copeid
(LEAD) KDB stops investment talks with Lehman Brothers
(ATTN: CHANGES headline, lead; ADDS more details from para 5)
SEOUL, Sept. 10 (Yonhap) -- South Korea's state-run Korea Development Bank (KDB) said Wednesday it has suspended talks with Lehman Brothers Holdings Inc. on a possible investment due mainly to differences over deal terms.
"There are disagreements over transaction conditions with Lehman at this point and considering financial market situations at home and abroad, we decided to discontinue the negotiations," KDB said in a statement.
The suspension came two days after Jun Kwang-woo, chairman of the Financial
Services Commission, urged the policy lender to use caution in a possible stake
purchase in the U.S. subprime-battered investment bank.
"KDB should approach the possible deal carefully because KDB's privatization
process has not yet started and domestic financial markets have suffered
trouble," Jun said. "It would be better for private lenders to take the
lead in buying a global investment bank."
Last week, KDB chairman Min Euoo-sung said the lender was discussing ways to form
a consortium with local banks for investing in Lehman Brothers.
"KDB is in talks with Lehman to buy a stake in the company, but the lender
has yet to narrow differences with Lehman over possible takeover prices," he
said.
The negotiations have drawn mixed responses from market watchers here.
Proponents say KDB's takeover of Lehman could pave the way for the lender to
become a global investment bank in a relatively short period of time, but critics
argue South Korea could be directly exposed to the subprime mortgage meltdown
when the end of that damaging rout is still not yet in sight.
South Korea plans to start reducing its 100 percent stake in KDB next year and
fully privatize it by 2012 through share and private sales.
Rumors about an end to talks by KDB with Lehman sent shares of the U.S.'s
fourth-largest securities firm plunging 45 percent on Tuesday in New York on
growing concerns about Lehman's ability to raise capital. Lehman is set to
announce its third-quarter earnings and "key strategic initiatives"
late Wednesday.
sooyeon@yna.co.kr
(END)
SEOUL, Sept. 10 (Yonhap) -- South Korea's state-run Korea Development Bank (KDB) said Wednesday it has suspended talks with Lehman Brothers Holdings Inc. on a possible investment due mainly to differences over deal terms.
"There are disagreements over transaction conditions with Lehman at this point and considering financial market situations at home and abroad, we decided to discontinue the negotiations," KDB said in a statement.
The suspension came two days after Jun Kwang-woo, chairman of the Financial
Services Commission, urged the policy lender to use caution in a possible stake
purchase in the U.S. subprime-battered investment bank.
"KDB should approach the possible deal carefully because KDB's privatization
process has not yet started and domestic financial markets have suffered
trouble," Jun said. "It would be better for private lenders to take the
lead in buying a global investment bank."
Last week, KDB chairman Min Euoo-sung said the lender was discussing ways to form
a consortium with local banks for investing in Lehman Brothers.
"KDB is in talks with Lehman to buy a stake in the company, but the lender
has yet to narrow differences with Lehman over possible takeover prices," he
said.
The negotiations have drawn mixed responses from market watchers here.
Proponents say KDB's takeover of Lehman could pave the way for the lender to
become a global investment bank in a relatively short period of time, but critics
argue South Korea could be directly exposed to the subprime mortgage meltdown
when the end of that damaging rout is still not yet in sight.
South Korea plans to start reducing its 100 percent stake in KDB next year and
fully privatize it by 2012 through share and private sales.
Rumors about an end to talks by KDB with Lehman sent shares of the U.S.'s
fourth-largest securities firm plunging 45 percent on Tuesday in New York on
growing concerns about Lehman's ability to raise capital. Lehman is set to
announce its third-quarter earnings and "key strategic initiatives"
late Wednesday.
sooyeon@yna.co.kr
(END)
