Daewoo Securities shares up for sale

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Daewoo Securities shares up for sale

The Korea Development Bank (KDB) has issued a notice of sale for its 43 percent stake in Daewoo Securities.

The sale, long awaited by local financial players, is likely to be the biggest deal for the second half of the year fetching well over 2 trillion won ($1.7 billion).

Interested buyers are required to submit discretionary agreement by Oct. 30, and preliminary bid by Nov. 2.

KDB will be selling 43 percent or 140.5 million shares in Daewoo, and 100 percent or 7.8 million shares in KDB Asset Management as a package.

Daewoo is the country’s No. 2 brokerage after NH Investment & Securities with total assets of 4.3 trillion won. It currently runs more than 100 brokerage branches across the nation and also has well-established investment banking operations.

KB Financial Group and Mirae Asset Group are set to compete for Daewoo, as the brokerage business is becoming a key feature within financial firms. KB is determined to strengthen its brokerage businesses as the environment for commercial banking grows increasingly challenging amid low interest rates. Major financial reforms are also currently underway, forcing banks to diversify business portfolios.

Last year, KB Financial submitted a bid and failed to purchase Woori Investment & Securities, losing out to NH Nonghyup.

Mirae Asset Group, another party with a strong interest in Daewoo, is also prepping for the deal.

Mirae Asset Securities, the brokerage arm of the group, said earlier last month that it planned to raise 1.2 trillion won from a rights issue, as the group seeks to generate enough cash to finance the buyout.

“Once the buyout deal is completed, Daewoo Securities will probably be reborn as the biggest brokerage firm in the country in terms of asset,” said Cha In-hwan, an analyst at Hana Financial Investment. “And its share price will be re-evaluated based on that premium.” [


BY PARK JUNG-YOUN [park.jungyoun@joongang.co.kr]

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