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29th July 2011

TStone & Flowers joint bid for Woori?

It is reported that Tstone is discussing with JC Flowers the two forming a consortium to bid for a stake in Woori Financial. It was reported that the government received three letters of interest by the first deadline of 29th June, all from Private Equity Firms. It is suggested the three PE firms were MBK Partners, Vogo Investment and TStone, all are South Korean. It is hoping to receive preliminary bids at the second deadline of August 17th.


Woori Financial is the country's largest bank and the government is seeking a part privatisation with a sale that was originally planned to be 57% of the equity. It is now suggested that the government may sell a smaller proportion rather have the attempt at sale fall altogether.


Tstone is a South Korean Private Equity firm. JC Flowers has participated in many banks' restructuring notably in Japan and Germany and is currently thought to be interested in UK banking assets.


The South Korean authorities continued pursuance of Lone Star who bought a controlling stake of Korea Exchange Bank in 2003 has alarmed many foreign financial institutions and changed South Korea from destination of Choice as an Asia Pacific hub to one attracting few investments. So far the courts have rejected every case brought by the authorities against Lone Star, although the retrial of the Lone Star country manager at the time of the KEB acquisition is occurring currently. Meanwhile the authorities have prevented three separate attempts to buy the KEB stake from Lone Star and are currently sitting on a fourth and indicating they will not give a decision until 2012.