U.S. team looks for new Hyundai terms

Wilbur Ross hopes to establish palatable terms that the minority investors of Hyundai Securities can accept

By CNN's Alex Frew McMillan in Hong Kong

SEOUL, South Korea -- American International Group and W.L. Ross & Co. have offered to give ground in their deal to buy Hyundai Securities.

The U.S.-led team agreed on Aug. 22 to buy three Hyundai financial companies, including Hyundai Securities, South Korea's third-biggest brokerage.

But the team has been threatening to pull out of its bid, after a dispute over the price. The U.S. investors want only to pay 7,000 won a share for a 29 percent stake in Hyundai Securities. The brokerage has stuck an 8,940 won tag on the shares.

Now the American group proposes allowing minority shareholders to buy into Hyundai Securities at the same 7,000 won price, according to reports.

The investors have proposed letting the shareholders buy more than 50 billion won in Hyundai Securities stock at 7,000 won.

Ross looking for palatable terms

That would see the American team's stake in the brokerage shrink from 29 percent, but the investors are willing to give that ground, the reports state, citing officials close to the talks.

Wilbur Ross, CEO of W.L. Ross, said over the weekend that the group wasn't flexible on price but would consider other ways of making the deal palatable for minority investors.

The total deal is worth $1.6 billion (2 trillion won) and also includes Hyundai Investment Trust & Securities and Hyundai Investment Trust Management Co.

The U.S. team originally agreed to pay 1.1 trillion won for management control of and stakes in the three Hyundai companies. The Korean government agreed to chip in another 900 billion won.

But Hyundai Securities balked at the 7,000 won that the deal set on their stock. Korean regulations prevent public stock being sold at more than a 10 percent discount.

The stock rose rapidly around the inking of the agreement, trading above 10,000 won. It had fallen back to 8,020 won on Tuesday afternoon, still more than 10 percent over 7,000 won.

Hyundai Securities' board, which passed a resolution not to accept less than 8,940 won, will now decide how tasty the new terms are.

Ross told CNN last week that the American team can only set aside the 1.1 trillion won for a short window of time. It is willing to walk away if there's no progress.

"We've been at this 15 months already, and we can't force money on people," he said on Friday. "If they don't want the money, that's fine, and they can fix the problem themselves."