Korea Development Bank CEO and former Lehman Seoul branch manager Min Euoo Sung confirmed that talks with Lehman about a possible investment are still continuing. Note that Min has been the driving force behind the deal; the stumbling block appears to have been getting official approval. With talks apparently fairly serious, it would seem some official impediments have been cleared. However, a Bloomberg story quotes an unnamed government source says that no application to invest in Lehman has been made. That may not be a sign that something is amiss; an application probably requires a price and a deal structure. But one would think that preliminary talks with the relevant agencies would be in order, and there is no indication as to whether they are underway.
Failure to cinch a deal with KDB, or a KDB-led group would be a serious blow, since it would suggest either that Lehman’s price expectations were unrealistic, that KDB made some due diligence discoveries that changed its view or valuation, or that Lehman would not give the reps and warranties that KDB sought. The next best course of action, selling all or part of its asset management group, is a sign of desperation, since that is Lehman’s best remaining asset.
Korea Development Bank is in talks to buy a stake in Lehman Brothers Holdings Inc., the fourth-biggest U.S. securities firm…..
Korea Development may team with a domestic lender, probably Woori Finance Holdings or Co. Hana Financial Group Inc., to buy a stake in Lehman, Dong-a Ilbo reported today, citing financial officials that it didn’t identify.
Lee Jung Dae, a spokesman for Seoul-based Hana, said the company has no plans to join a bid for a stake in Lehman. Woori spokesman Lee Won Chuel said his firm hasn’t received any offer from Korea Development Bank or any other party to partner in buying a stake.
“I don’t think KDB will secure enough local partners when there are other M&A targets in the home banking sector,” said Shim Jae Duk, oversees the equivalent of $800 million as head of equities at Hyundai Wise Asset…
A government official, speaking on condition of anonymity because he isn’t allowed to publicly discuss the matter, has said the financial regulator has yet to receive an application from Korea Development for permission to invest in Lehman.
Jun Kwang Woo, chairman of South Korea’s Financial Services Commission, on Aug. 25 warned of risks of buying overseas banks, saying it wasn’t appropriate for state-run banks like Korea Development to lead such efforts…..
Korea Development is set to be privatized, with the government planning to sell a 49 percent stake in a holding company to be set up for KDB and its three affiliates by 2010. The remaining 51 percent would be sold by 2012.