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Private equity firm MBK and Young Poong have secured a more than 5% stake in Korea Zinc through a tender offer that closed on Monday, Young Poong said in a regulatory filing.
They received acceptances for just over 1.1 million shares of Korea Zinc, equivalent to 5.34% of outstanding shares, and plan to secure all the shares on Thursday as previously announced, Young Poong said.
Korea Zinc has made its own tender offer to purchase shares in the company as it seeks to fend off what it called a “hostile” takeover attempt.
MBK said the additional shares would enable it to have enough voting rights to push ahead with their proposals at shareholders’ meetings.
“We believe today will be recorded as a meaningful milestone for Korea’s capital market,” MBK said in a statement, adding that it marked the first step to enhancing corporate value by improving corporate governance.
Korea Zinc has been in a bitter battle for control of the $12 billion zinc empire with the co-founding Chang family, whose electronics conglomerate Young Poong made an initial joint offer with MBK in September.
Investors noted that MBK and Young Poong together are set to become the biggest shareholder of Korea Zinc once the results of the tender offer are finalized if Korea Zinc manages to proceed with its share buyback agenda as planned, which could pave the way for MBK and Young Poong to take the control of Korea Zinc’s management.
The competing sides in combination with their likely supporters had held about a one-third stake in Korea Zinc before the tender offers, according to calculations by Meritz Securities.
“We see that the result fell short of the target set by the other party. We will respond accordingly in the future. We ask for shareholders’ continued support and encouragement,” Korea Zinc said in a statement.
MBK and South Korea’s Young Poong had conducted a tender offer to purchase up to 14.6% of Korea Zinc shares, for an estimated price tag of up to 2.5 trillion won ($1.85 billion) with a tender price set at 830,000 won per share.
Last week, Korea Zinc raised the purchase price and size of its tender offer by 7% to 890,000 won each and increased the number of shares it plans to acquire to up to 20% to 4,140,657 shares alongside Bain Capital, valuing the tender offer at 3.6 trillion won. The offer closes on Oct. 23.
(By Heekyong Yang and Jack Kim; Editing by Ed Davies and Bernadette Baum)
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