Regent Pacific set to bid for Korean bank
Hong Kong-listed fund management group Regent Pacific looks set to make a bid for Korea First Bank, upstaging an earlier bid by Newbridge Capital of the United States for the state-run lender.
Regent Pacific announced yesterday that it would invest US$1 billion to set up a financing group in Seoul with a view to expanding its financial operations in South Korea.
C.K. Koh, president of Daeyu Regent Securities, Regent's joint-venture Korean brokerage, said the Korea First bid was one of many the firm planned to make as part of an Asian expansion plan that could run into billions of dollars.
Next week, Regent chairman Jim Mellon will travel to Seoul for talks with Lee Hun-jai, chairman of the Korean Financial Supervisory Commission, and other government officials on its investment plans.
Regent is considering setting up a financial holding company to aid those plans.
The possible bid for Korea First and other financial institutions comes a year after it bought a 21.5 per cent stake in Daeyu.
Like other financial companies such as US investment bank Goldman Sachs, Regent is taking advantage of the plunging value of Korean financial assets to make inroads into a market previously all but off limits to foreign investors.
If it succeeds in buying Korea First, it would be the second Korean bank to fall into the hands of a Hong Kong institution this year.
HSBC Holdings - which was outbid by Newbridge for Korea First - agreed to buy 70 per cent of Seoulbank for $900 million in February.
The international auctions of the two banks - taken over by the Korean Government following the Asian financial crisis - were demanded by the International Monetary Fund as part of a $60 billion emergency bailout loan package arranged in 1997.
While he would not confirm the Korea First bid, Regent Fund Management chairman Peter Everington said yesterday that eventually the group planned to invest in asset management, insurance and other areas as part of plans to create a 'financial supermarket' in South Korea.
'We believe it's absolutely correct to move into Korea. We see tremendous opportunities there in a wide variety of areas,' Mr Everington said.
'The new government represents a major sea change to investors, it's so much more friendly than it used to be.' The Financial Supervisory Commission, which is overseeing the nation's financial restructuring, said it was preparing to start negotiations with other investors to help in the sale of Korea First Bank.
'The Korean Government will open up the chance to other investors, as the exclusivity for Newbridge has expired,' said a commission official.
'But it doesn't mean the talks with Newbridge entirely collapsed. It's still ongoing.' The government put Korea First back on the market after Newbridge missed two deadlines this month to settle a non-binding December agreement to buy 51 per cent of the bank for a reported $600 million.
By bidding for Korea First, Regent hopes to trump Newbridge.
Although Newbridge managing director Weijian Shan said yesterday that the firm had made 'considerable concessions' in its latest bid, there is speculation that the government will soon end its four-month courtship of the US firm.
