Investors like KB’s holding company plan
Kookmin Bank, Korea’s biggest, rose by the most in more than six weeks in Seoul trading yesterday after Yonhap News reported that the bank’s adoption of a holding company structure will go as planned.Kookmin added 5 percent to 56,400 won ($49.96) at the market close, the highest since July 21. The benchmark Kospi was little changed at 1,426.43. Investors holding less than 15 percent in the bank will sell their shares through a buyback program, Yonhap said yesterday, citing an unidentified Kookmin official.
The buyback was one condition Kookmin set for its transition to a holding company. Kookmin spokesman Choi In-seok refused to confirm the report, saying the bank will make a regulatory filing on the matter tomorrow.
An 18 percent slide in the stock price this year had raised concern that more investors may use the buyback option than the company could afford to pay, derailing the plan.
“The holding company lead seems to be lifting sentiment on the stock,’’ said Park Jong-gyu, president of Hyundai Investments in Seoul, which manages the equivalent of $530 million in equities. A holding company structure will allow the lender to use 100 percent of its share capital for acquisitions. Kookmin, seeking takeovers and expansion overseas as increasing competition threatens to slow its profit growth in Asia’s fourth-largest economy, can only use 30 percent of its share capital for acquisitions under its current structure. Bloomberg
with the Korea JoongAng Daily
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