Top Zinc Producer Sees Record Surge Following Tender Offer
MBK Partners, in collaboration with the top shareholder of Korea Zinc Co., recently launched a tender offer to acquire a controlling stake in the world’s largest refined zinc producer. This move has resulted in a significant surge in the share price of Korea Zinc, reaching a record high of 24%.
The tender offer initiated by MBK Partners and Young Poong Corp. aims to purchase up to a 14.6% stake in Korea Zinc. This strategic acquisition is intended to enhance the corporate governance and overall corporate value of the company.
Background of the Deal
The proposed deal comes amidst escalating tensions over management control of Korea Zinc. The founding families of Young Poong Corp. have been at odds over the direction of the company, particularly in relation to the expansion into battery metals and renewable energy.
Choi Ki-ho and Chang Byung-hee, the co-founders of Young Poong Corp., have seen their families’ shareholdings shift over the years, leading to disagreements on the future strategy of Korea Zinc. The current chairman of Korea Zinc, Choi Yun-beom, has been vocal in his support for sustainable growth initiatives, while facing opposition from other family members.
Opposition and Response
Despite the tender offer by MBK Partners, Korea Zinc has expressed strong opposition to the deal, labeling it as a “hostile and predatory M&A” by a corporate raider. The company, led by Chairman Choi Yun-beom, is determined to resist the takeover attempt.
Investors and industry experts are closely monitoring the outcome of the tender offer, with speculation about potential white knights entering the fray. The private equity firm’s agreement with Young Poong Corp. and its founding family members, who collectively hold a significant stake in Korea Zinc, sets the stage for a complex battle for control.
Implications and Future Outlook
The tender offer, which is set to run from September 13 to October 4 at a price of 660,000 won per share, represents a premium of 19% above the closing price on Thursday. This offer values Korea Zinc at approximately 11.5 trillion won ($8.6 billion), indicating the significant interest in acquiring a stake in the company.
MBK Partners, with a track record of successful investments and managing over $30 billion in capital, is poised to gain a substantial foothold in Korea Zinc through this deal. The voting rights and strategic influence that the private equity firm will hold over the company could shape the future direction of Korea Zinc.
In conclusion, the tender offer launched by MBK Partners and Young Poong Corp. for Korea Zinc marks a significant development in the global zinc market. The outcome of this deal will not only impact the corporate governance of Korea Zinc but also have broader implications for the industry as a whole. Investors, stakeholders, and industry observers are eagerly awaiting the resolution of this high-stakes battle for control.
