MBK Partners and Young Poong Acquire 5.34% Stake in Korea Zinc Following Tender Offer

SEOUL: Private equity firm MBK Partners and Young Poong Corp. have successfully acquired a 5.34 percent stake in Korea Zinc Inc., the world's largest zinc smelter, as part of their ambitious multibillion-dollar tender offer. This acquisition was confirmed through a regulatory filing by Young Poong, which also stated that the entire stake would be purchased at a price of 830,000 won (approximately US$614) per share on the upcoming Thursday. According to Yonhap News Agency, Young Poong, the tender offer, which concluded on Monday, marks a significant step in the coalition's strategy to increase their influence over Korea Zinc. MBK and Young Poong, who is the top shareholder of Korea Zinc, initially announced on September 12 their intention to acquire up to 14.61 percent of the company. Following the initial announcement, they raised their offer price twice, ultimately reaching 830,000 won per share. Korea Zinc responded to this acquisition attempt by launching a counteroffer to repurchase its own shares, init ially matching the coalition's offer and later increasing it to 890,000 won per share. The company plans to buy back treasury stocks by October 23 for cancellation in an effort to enhance shareholder value, aiming to secure up to 20 percent of treasury shares. Despite the MBK-Young Poong coalition's efforts, there was skepticism in the market about their ability to meet their acquisition target, given the financial and legal uncertainties surrounding Korea Zinc. The offer price set by MBK was notably lower than Korea Zinc's counteroffer, leading industry experts to anticipate that the coalition would likely acquire less than a 10 percent stake. The competition between the two sides has been intense, with neither side achieving a decisive victory as yet. An official from a local financial investment firm commented on the ongoing dispute, predicting that the battle could extend into the early next year, characterized by ad hoc shareholder meetings and competitions for voting rights. Amidst this heated takeo ver battle, the Financial Supervisory Service, South Korea's financial regulator, issued a warning last week against any unfair trading practices, vowing to investigate and penalize any such activities.