HSBC, which has been trying to secure a landmark deal in Korea for eight years, has agreed to pay the investment group Lone Star about $6.3 billion in cash to acquire a majority stake in Korea Exchange Bank (KEB). But the deal comes against a backdrop of huge legal uncertainty.

Europe's largest bank by assets said completion was contingent on a raft of conditions being met by next April, which include all government and regulatory approvals.

It has also included a material adverse change clause which would allow HSBC to walk away if due dilligence unearthed something in the Korean Bank's financial position of which it is not currently aware.

Stephen Green, HSBC's group chairman, told The Times that agreeing a price was a "milestone" on the way to a done deal, although he acknowledged there were still hurdles to overcome.

"It's a very fair price," he said, noting that the amount represents 1.83 times KEB's book value, 12 times historic earnings and a 21 per cent premium to the share price in recent days.

HSBC struck its deal with Lone Star just under a fortnight after it emerged the two were in talks over the future of the fund's 51 per cent stake.

At the time talks emerged, the stake was valued at about $4.5 billion.

However, the agreed price comes as a long-running legal dispute over the ownership of KEB continues to fester. It could derail a deal.

Lone Star paid $1.2 billion to buy its majority stake from the bank — now the country's sixth-largest — in 2003, when the Korean firm was teetering close to bankruptcy.

It invested $3 billion and last year tried to sell the whole of the stake to Kookmin Bank for $7.3 billion.

However, the size of the profits Lone Star would have been in line for sparked public outrage in Korea and the Government began to investigate the terms of the original deal, putting the ownership of KEB into dispute.

A former Government official who approved the original sale, a former KEB executive and the Texas-based firm itself are mired in legal proceedings.

It has been speculated that legal wranglings could delay any transaction for as much as a year. It is also understood that Kookmin and Hana, another local financial firm, have considered tabling rival offers for the stake.

HSBC shares traded unchanged at 897p at lunchtime today.

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