Lone Star taps Credit Suisse to handle KEB

HONG KONG: US private equity firm Lone Star has replaced Citigroup with Credit Suisse as its adviser on the sale of its Korea Exchange Bank stake, sources with direct knowledge of the matter said on Thursday.

UK-based bank HSBC last month dropped a $6.3 bn offer for the 51 per cent stake in KEB, blaming turmoil in financial markets.

HSBC agreed a year ago to buy Lone Star's majority stake but the deal was beset by regulatory delays. Lone Star, which has been struggling to exit its $1.2 bn investment since 2006, is likely to offload its KEB shares in a block trade at a discount, analysts said after HSBC walked away.

Rival Kookmin Bank, whose 2006 deal to buy a bigger stake of KEB for $7.3 bn was scrapped by Lone Star, has said it was watching the situation with interest.

Citigroup and Credit Suisse declined to comment. The Financial Times was first to report the Credit Suisse appointment. Credit Suisse worked with KEB on its sell down of $1.3 bn shares in June 2007.