SEOUL: A high-stakes tender offer by MBK Partners, in collaboration with Young Poong Corp., for a significant share in Korea Zinc Inc. is approaching its deadline on Monday. The offer, aimed at acquiring up to 14.61 percent of Korea Zinc, the largest zinc smelter globally, has been met with challenges as the current trading price of Korea Zinc’s shares remains below the proposed buying price.
According to Yonhap News Agency, MBK Partners, along with Young Poong Corp., which is the largest shareholder of Korea Zinc, made public their acquisition plans on September 12. Since the announcement, the coalition has increased their initial offer twice, with the latest bid set at 830,000 won (approximately $614) per share. This move has sparked a series of countermeasures from Korea Zinc’s management.
In a tactical response, Korea Zinc’s Chairman, Choi Yun-beom, initiated a counteroffer aimed at repurchasing and cancelling Korea Zinc shares at a price initially matching MBK’s offer and later elevating it to 890,000
won per share. Despite these efforts, Korea Zinc’s shares experienced a minor dip, closing at 793,000 won, which is 0.13 percent down, contrasting with the broader KOSPI’s gain of 1.02 percent.
This price discrepancy between the tender offer and the market value has led industry experts to speculate that MBK Partners and Young Poong may not achieve their desired stake. The prevailing sentiment among analysts is that the coalition might secure less than 10 percent of Korea Zinc, primarily due to the financial and legal uncertainties that currently cloud the company’s outlook.
An official from a local financial investment firm weighed in on the situation, indicating the complexities involved. “I don’t think it’s going to be a clear-cut victory for one side or the other,” said the official. He further suggested that the acquisition battle might extend into the new year, characterized by sporadic shareholder meetings and intense jockeying for voting rights.
Moreover, if Korea Zinc’s share price surpasses the o
ffer price by MBK Partners on the deadline and investor hesitancy persists, there might be a need for the coalition to prolong the tender offer period to garner more interest. Nonetheless, some market analysts remain skeptical about the effectiveness of extending the tender offer without a revised approach to the upcoming general shareholders’ meeting.