A deal by South Korea’s KB Financial Group Inc (KRX:105560) to buy the local insurance business of Dutch ING Groep NV (AMS:INGA) has been placed under doubt as several directors of KB’s board insist for a price below the current USD2.05bn (EUR1.6bn) offer, according to sources cited by Reuters on Friday.
In order to complete, the transaction needs the approval of all 12 KB board members at their meeting scheduled for 18 December, while some of its independent directors view the price as too high given the risks faced nowadays by an insurer, a source close to the board told the news agency.
The KB board met last week over the matter, but it had postponed a final decision after failing to agree on the offer price.
On the other hand, question arises as to how low a price can ING accept after having already agreed to reduce the asking value of USD2.2bn for the business by almost 7%. The Dutch group has no need to speed up the sale of its South Korean unit as European Union regulators agreed in November to give it more time to repay state aid, a source said.
ING is selling this business as part of a larger divestment programme for Asia to pay back the EUR10bn state aid received during the global financial crisis.
KB Financial, looking at options to finance the deal, is considering issuing more bonds than initially expected to cover the price, Reuters quoted a a South Korean regulatory source as saying.
None of the two parties wished to comment to the news agency.