KB Financial Group and Korea Investment Holdings are likely to face off again in the auction of a controlling stake in Hyundai Securities, one of the five largest brokerage houses in Korea.

In separate filings Friday, the two revealed to have tendered letters of intent to buy a combined 22.56 percent stake in Hyundai Securities, valued at around 300 billion won ($250 million).

“We intend to explore the possibility of a purchase to see if Hyundai Securities fits our strategic focus on wealth management and commercial investment banking, and if there will be sufficient synergy (between KB and Hyundai),” KB Financial said in the regulatory filing. 

The company is said to have promptly begun due diligence on Hyundai Group's securities arm, which is the industry’s fifth largest with 3.2 trillion won in assets.

KB and Korea Investment, which both run their own brokerage houses, have been seeking expansion in the country's fragmented securities sector through mergers and acquisitions. Late last year, they bid for control of KDB Daewoo Securities, ranking second with 4.3 trillion won in assets, in a sale that fetched nearly 2.4 trillion won.

The sale is part of the parent Hyundai Group’s self-help plan to ease a liquidity crunch at its flagship unit Hyundai Merchant Marine. Hyundai Merchant has a stake of 22.43 percent and the rest of the stake being sold is owned by the group’s chairwoman Hyun Jeong-un and her family.

The group said it hopes to speed up the sale and complete the transaction by the end of March.

The auction is likely to draw in more bidders, deal watchers said, with another local brokerage, Kiwoom Securities, said to be exploring participation. According to sale advisor E.Y. Han Young, the deadline for interested parties to submit letters of intent is Feb. 29.

By Lee Sun-young
(milya@heraldcorp.com)