South Korean private equity firm KCGI Co.is likely to acquire a small local brokerage house Hanyang Securities Co.for 244.9 billion won ($179.8 million), although financial authorities may block the takeover amid talks over an illegal practice in the deal.
South Korea’s financial regulators are closely watching the deal.“We are well aware of the talks of stock parking in the acquisition process of Hanyang Securities,” said a Financial Supervisory Service official.“We will thoroughly check the deal once a major shareholder eligibility review is requested.”Financial authorities, which assess the eligibility of financial companies’ owners through the review, are expected to ban KCGI’s takeover of Hanyang Securities if they find any illegal activities such as stock parking in the deal.
The securities firm said on Friday its top shareholders -- Hanyang University Foundation, Paik Nam Tourist Co.and The Christian Newspaper -- selected the Seoul-based activist fund KCGI as a preferred bidder to sell their combined stake of 29.6% at 65,000 won per share, more than quadruple of its closing of 15,580 won on the day, in a regulatory filing.
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