British bank HSBC Holdings PLC said Friday it has canceled an agreement to purchase a controlling stake in a South Korean bank from US private equity group Lone Star Funds amid world financial turmoil. HSBC said in a statement that it “exercised its right to terminate the acquisition agreement with immediate effect.” The London-based bank cited “all relevant factors including current asset values in world financial markets” for the decision. “Discussions with Lone Star have not led to agreement on how the transaction might proceed on a basis acceptable to HSBC,” the bank said. HSBC agreed in September last year to purchase the stake in Korea Exchange Bank from Dallas, Texas-based Lone Star, which has faced regulatory and legal obstacles in efforts to sell its 51 percent stake in the local lender it purchased in 2003. “In the light of developments around the world, not least changes in asset values in world markets, we do not believe that it would be in the best interests of shareholders to continue to pursue this acquisition on the terms negotiated last year,” Sandy Flockhart, chief executive officer of HSBC Asia said.
