January 21, 2010 / 8:04 AM / 9 years ago

UPDATE 1-Macquarie shortlisted for Prudential assets -sources

* S. Korea units estimated to fetch below $500 mln -source

* Hanwha confirms on shortlist

* PE fund MBK Partners failed to make shortlist - source (Adds background, detail, Hanwha quote)

By Kim Yeon-hee

SEOUL, Jan 21 (Reuters) - Australia’s Macquarie Group (MQG.AX) and South Korea’s Hanwha Securities (003530.KS) are among the shortlisted bidders for Prudential Financial’s (PRU.N) two South Korean units, three sources told Reuters on Thursday.

One of the short-listed bidders, who declined to be identified because the process was confidential, said the sale of Prudential’s South Korean securities and asset management businesses was expected to fetch less than $500 million.

Hanwha confirmed that it was one of the shortlisted bidders and said the process has made little progress so far.

“To our knowledge, we are included in the list,” its spokesman said, reiterating that they expected a preferred buyer would be picked either later this month or early February. [ID:nTOE60B00V]

Private equity fund CVC and South Korea’s KB Financial Group (105560.KS) have also been shortlisted, two sources familiar with the process said.

KB and Hanwha are considered the leading contenders, the two sources said.

Asian private equity fund MBK Partners submitted a bid but did not make the shortlist as its offer was lower than the others, one of the sources said.

Prudential, the second-largest U.S. life insurer, ideally wants to sell both units together, the source said.

Prudential, Macquarie, MBK and KB Financial declined to comment. Deutsche Bank (DBKGn.DE), the adviser on the sale, was not immediately available for comment.

A Prudential official in Seoul said last week that four or five bidders appeared to be participating in the auction.

Bidders are keen to get their hands on the two businesses up for sale, Prudential Investment & Securities and Prudential Asset Management, as they would provide distribution channels to the retail market.

KB Financial and Hanwha have been looking to enhance their brokerage and wealth management businesses, to better compete with sector leaders Samsung Securities (016360.KS) and Woori Investment & Securities (005940.KS).

For Macquarie, the most active foreign bank in South Korea’s stock market, the assets of Prudential would be a springboard to expand sales of its derivative products, such as equity-linked warrants.

The Australian group has just launched banking operations in South Korea, expanding on its investment banking and fund operations, targeting foreign exchange and corporate banking, after winning a license in South Korea late last year. (Additional reporting by Sonali Paul; Editing by Lincoln Feast)

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