Hana Financial Group has reportedly been striving to ask Lone Star Funds to agree on lowering the takeover price of Korea Exchange Bank.

The alleged price negotiation between Hana Financial and the U.S.-based equity fund comes after the Financial Services Commission instructed the financial group to submit a revised application for the deal.

Though Hana Financial applied for the FSC’s regulatory approval in acquiring a 51.02 percent stake in KEB from Lone Star one year ago, the regulator has yet to endorse their preliminary deal.

One of the main factors for the postponement was a court’s ruling that Lone Star engaged in stock manipulation. As a result, the FSC ordered the fund to sell 41.02 percent of its 51.02 percent stake in KEB on Nov. 18.

Simultaneously, the regulator indirectly demanded Hana Financial renegotiate with the fund, in an alleged move to reflect the changed situation that KEB stock price range between 7,000 ($6.15) and 8,000 won while it came to about 13,000 won a year before.

Hana Financial and the FSC have been under tough criticism among the KEB union and a group of lawmakers for paving the way for the “culprit” to rake in huge management premiums via the M&A deal.

During the second negotiation in July, Hana and Lone Star agreed to trade the KEB shares for about 4.4 trillion won, or 13,390 won per share.

The KEB union is calling for Hana Financial to push for acquisition price to be lowered by 2 trillion won to about 2.4 trillion won.

But industry observers predict that a revised takeover price will be about 4 trillion won, being slashed by about 400 billion won.

A Hana spokesman did not deny the necessity of the financial group moving to appease KEB’s angry unionized workers and a group of citizens protesting the scenario that the FSC will eventually approve the Hana-Lone Star deal.

“It is true that the effort, including lowering the takeover price (amid the currently cheaper KEB stock price as compared to the price agreed upon by the two parties), is needed,” he said.

The deal between Hana and Lone Star expired on Nov. 30 after they agreed to extend it for more six months last July.

Starting Dec. 1, any of the two parties is entitled to drop out of the deal.

By Kim Yon-se (kys@heraldcorp.com)