S.Korea's KT&G buys Shinhan shares worth $213 mln

Source from:  Reuters 06/22/2007

SEOUL, June 20 (Reuters) - KT&G , South Korea's top tobacco company, said on Wednesday it bought a small stake in No. 2 domestic financial firm Shinhan Financial Group for $213 million, eyeing investment gains. KT&G said in a filing to the Korea Exchange that it acquired 3.5 million shares, or a 0.9 percent of outstanding common shares, in Shinhan Financial at 56,200 won per share, the closing price on Tuesday. The deal value was 196.7 billion won ($212.5 million). KT&G did not elaborate and Shinhan Financial declined to comment. A source close to the deal said KT&G bought the shares from Shinhan Bank, the main arm of Shinhan Financial. Shinhan Financial previously said the banking unit was selling off its entire stake in its parent group -- 4.3 million shares -- to a number of investors by June 22. The sale is mandatory under domestic laws that order companies to sell shares in parent companies within three years from the acquisition. "Shinhan Bank will sell off the rest of its stake soon," said the source, who declined to be named. In February, a state-run agency, Korea Deposit Insurance Corp., sold most of its shares in Shinhan Financial to institutional investors including Japan's Mizuho Financial Group for $1.2 billion. French bank BNP Paribas is the top shareholder of Shinhan Financial Group with a 9.06 percent stake, with Mizuho holding another 1.25 percent stake. Shinhan Financial shares rose 4.45 percent to end at 58,700 won before the announcement, against a 1.33 percent fall in the wider market . ($1=925.7 Won)