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Hana Financial Group Inc. (086790), South Korea’s third-biggest financial services group by assets, rose the most in almost four weeks in Seoul after announcing a plan to make Korea Exchange Bank (004940) a fully owned unit.
Hana advanced as much as 5.9 percent, the biggest intraday gain since Jan. 2, and traded at 40,850 won as of 11:05 a.m. in Seoul. Korea Exchange Bank gained 5.2 percent to 7,710 won, compared with the benchmark Kospi index’s 0.4 percent decline.
Korea Exchange Bank shareholders will be offered 0.1894 of a Hana share for each share of KEB they own as Seoul-based Hana seeks to delist the unit, the companies said in regulatory filings. The move follows Hana’s 4.4 trillion won ($4 billion) acquisition of more than half of KEB last year to help it compete with bigger rivals amid an economic slowdown.
“The plan would bolster Hana’s capital and will improve long-term efficiency and earnings,” Michael Na, a Seoul-based analyst at Nomura Holdings Inc., said by phone. “Investors seem to be betting on Hana’s long-term growth outlook with the plan. KEB shareholders can also seek arbitrage profit from the designated stock-swap ratio at the current price level.”
Hana owns 60 percent of KEB after buying stakes from Dallas-based Lone Star Funds and Export-Import Bank of Korea. The share-swap offer is pending approval at a shareholders’ meeting to be held in March, according to the filings.
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