Hana chief shies away from Woori bidding

Hana Financial Group chairman Kim Seung-yu on Tuesday downplayed the possibility of the financial company participating in a bidding competition for Woori Financial Group.

His remarks came one day ahead of the deadline for submitting letters of intent to financial authorities to attend the takeover bidding for state-run Woori Financial.

He told reporters that it would not be easy for the group to participate in the Woori bidding, pointing to the preliminary deal between Hana Financial and U.S.-based Lone Star Funds to trade the majority stake in Korea Exchange Bank.

“If we attend the bidding, it (the contract to acquire KEB) will break down automatically,” he said. “The contract with Lone Star has yet to break down.”

He added that the result on whether they could extend the deal with the U.S. fund would come out soon.

After the preliminary contract expired on May 24, Hana Financial allegedly tried to keep it alive through additional negotiations with Lone Star.

Though the group has continued to express a positive view over the deadline extension, market observers have already said an extension would be of no significance amid financial regulators’ wait-and-see stance.

The issues to be ruled on include alleged stock manipulation of the now-defunct Lone Star Korea and the shareholder eligibility of Hana Financial.

There has been speculation among critics that the Hana chairman has been desperate to placate the group’s shareholders and investors that participated in raising funds to takeover KEB.

Irrespective of Kim’s remarks on bidding for Woori, the coming decision of Hana ― and the next strategy of Lone Star ― has been drawing keen interest in the financial market.

Aside from Hana, prospective bidders such as KB Financial Group have not expressed willingness to bid for Woori Financial.

Research analysts raised the possibility that the sale process could be postponed again, following the same pattern as the latter half of 2010.

By Kim Yon-se (kys@heraldcorp.com)