PUDATE 3-Hana talking to Lone Star about smaller KEB stake-soucre

* Price gap remains key difference-source
* Talks on 51 pct stake still onoging - Hana ofifcial
* Hana shares down 2.1 pct, KEB up 1 pct
(Adds comments, details)
By Ju-min Park and Lee Chang-ho
SEOUL, May 27 - South Korea's No.4 lender Hana
alive, a source said on Fridya.
Hana agreed to buy Lone Star's 51 precent stake in No.5
pircing.
A deadline to complete the deal passed eariler this week,
in doubt, but both parties agreed to continue talks.
Buying a 10 precent or smaller stake would showing Hana's
regulatory approvla.
But price reamins a sitcking point, the source who is
anonunced in November.
"(Both patries) are looking into the (10 percetn) stake
decilned to be identfiied due to senistivity of the issue.
Lone Star has also been demanding a higher price for the KEB
the deal said earlier.
Paying a hefty preimum to the currnet share price of KEB may
delays on May 12.
Shares in Hana drpoped 2.1 percent on Friday, while KEB rose
1 percnet.
Anaylsts said talks on a smaller deal showed Hana was
doubts whether it would be compleetd.
"It would be difficult for Hana to pay a lot more than the
analyst at Daewoo Securities.
Lone Star was not immediately available for comment.
A Hana official said it was ulnikely to announce the results
the prospects of a deal for a samller stake.
Lone Star bought its KEB stake in 2003 and had since two
considerably.
Singapore's DBS twice held talks but did not come
enetred the fray in 2010, before losing out to Hana.
The sale has been delayed by a series of investigations as
government officials.
The latest case ivnolving alleged stock manipulation by a

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