SEOUL: A high-stakes tender offer by MBK Partners, in conjunction with Young Poong Corp., to secure a significant portion of Korea Zinc Inc., is nearing its expiration on Monday. Despite multiple increases in the offer price, shares of the world’s largest zinc smelter remain below the proposed purchase value, signaling potential challenges in the acquisition attempt.
According to Yonhap News Agency, Yonhap, MBK Partners, a prominent private equity firm, and Young Poong Corp., the largest shareholder of Korea Zinc, announced their collaborative bid on September 12 to acquire up to 14.61 percent of Korea Zinc. The offer price was subsequently raised twice, currently standing at 830,000 won (approximately US$614) per share. In a strategic countermove, Korea Zinc’s Chairman Choi Yun-beom proposed a buyback plan to repurchase and cancel shares at 890,000 won each, exceeding the coalition’s offer.
As of the latest trading session, Korea Zinc’s shares were listed at 796,000 won, marking a slight increase of 0.25 p
ercent from the previous day. The ongoing disparity between the tender offer and the counteroffer by Choi has led to speculation among market watchers about the potential outcome as the deadline looms.
Industry experts predict that the MBK-Young Poong coalition might not reach its target acquisition stake due to the higher counteroffer and existing market uncertainties. A financial industry official expressed doubts about a decisive outcome, hinting at prolonged negotiations and possible shareholder battles extending into the new year.
Should Korea Zinc’s share price surpass the coalition’s last offer by the close of Monday, and with investor sentiments still wary, MBK Partners may consider extending the tender offer period to garner more shareholder interest. Nevertheless, analysts are skeptical that merely prolonging the offer will suffice to attract the necessary stake, suggesting that MBK and its partner may need to refine their approach ahead of the upcoming general shareholders meeting.