Seoul: Shares of Korea Zinc Inc. jumped Monday after a local court again dismissed an injunction requested by Young Poong Corp. to bar the world’s largest zinc smelter from buying back its own shares.
According to Yonhap News Agency, the Seoul Central District Court rejected an injunction request made by Young Poong to prevent Korea Zinc from acquiring its own shares during the public tender offer period, which ends Wednesday. This decision marks the second instance where the court has turned down Young Poong’s attempts to stop Korea Zinc from purchasing its shares in the midst of a public tender offer by Young Poong and private equity firm MBK Partners.
Shares of Korea Zinc escalated by 6.43 percent, closing at 877,000 won (approximately US$648) following the court ruling. This legal battle stems from an ongoing tender offer by MBK and Young Poong, who last week announced they had secured a 5.34 percent stake in Korea Zinc through a multibillion-dollar tender offer aimed at taking control of the smelter.
On September 12, MBK and Young Poong declared their intent to acquire up to 14.61 percent of Korea Zinc, subsequently raising their offer price twice, reaching 830,000 won per share. Prior to the tender offer, the coalition of MBK and Young Poong held a combined 33.1 percent stake in Korea Zinc.
In retaliation to the tender offer, Korea Zinc initiated a counteroffer to buy back its shares at a heightened price, initially set at 830,000 won per share and later increased to 890,000 won. The company has expressed intentions to repurchase its treasury stocks by October 23 for cancellation, aiming to enhance shareholder value by securing up to 20 percent of treasury shares at the elevated price of 890,000 won each.