Wednesday, 16 August 2006South Korea's largest credit card firm LG Card looks set to be bought by the Shinhan Financial Group (SFG) in a deal worth a reported $7.5bn (Tú3.96bn).
The card firm is owned by creditors after hitting trouble late in 2003 when the credit bubble burst.
SFG fought off two other companies to be named as preferred bidder for LG Card, which has a 15% market share in South Korea.
The move will give SFG a hold on 23% of the nation's credit cards.
Savings potential
"Shinhan Financial is named as preferred negotiator... and we hope to finalise the deal in October," said Kim Jong-bae, deputy governor at Korea Development Bank - which is LG Card's main creditor.
News agencies citing unnamed sources said that SFG was set to pay about 68,000 won ($70; Tú37) per share to own 85% of LG card, which some analysts say is too expensive.
However, Samsung Securities analyst Jason Yu - who described the takeover as "a fait accompli" - said the savings made from the takeover would be greater than the cost.
LG Card has reversed its heavy debts by cutting costs and introducing greater scrutiny over loans.
Last year it made a 1.36 trillion won profit, against an 81.6bn won loss in 2004.
16 August 2006, BBC News |
Wednesday, 16 August 2006
East Asia
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