AIG bid wins Hanaro approval
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KT Corp and SK Telecom dominate South Korea's phone market.
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SEOUL, South Korea -- Shareholders of South Korean broadband operator Hanaro Telecom have approved a $1.1 billion bid package from American International Group (AIG) and Newbridge Capital.
The action brings to an end a protracted bidding war for Hanaro that involved its top shareholder, the LG Group, which held a stake of 18.03 percent, and its U.S. bid partner, the Carlyle Group.
The AIG-led consortium will now eclipse LG as the leading shareholder in Hanaro, with a 39.6 percent holding. LG's stake will fall to about 10 percent.
According to Yonhap news agency, Hanaro said Tuesday its official count showed that 63.8 percent of the votes cast, representing 174.8 million Hanaro shares, were in favor of the AIG-Newbridge deal, with votes representing 56.2 million shares against it.
"We are gratified that Hanaro shareholders have given our board of directors and management their resounding support," said Hanaro vice president Rhee Jong-myung following the vote.
LG and Carlyle had proposed to take 50 percent of Hanaro through a $640 million joint investment.
The AIG-Newbridge consortium, which had the backing of Hanaro's management, has promised $600 million in syndicated loans and $500 million of new investment.
The AIG win is a blow to LG, which wanted to put Hanaro together with its stakes in Dacom, LG Telecom and Powercomm to create a rival to South Korea's front-running telcommunication companies, SK Telecom and KT Corp.
