Korea Zinc Shares Surge Amid Takeover Bid from MBK Partners and Young Poong
Shares of Korea Zinc, the world's largest metal processing company, rose sharply following expectations of an increased takeover bid from South Korean investment firm MBK Partners and Young Poong, according to reports from foreign media.
On September 19, Korea Zinc’s shares closed at 707,000 won, valuing the company at 14.7 trillion won ($11.1 billion), surpassing the initial offer's valuation of 13.7 trillion won. MBK Partners and Young Poong are seeking to acquire a controlling 14.6% stake in Korea Zinc through a tender offer priced at 660,000 won per share, which represents a 19% premium over the closing price on September 12. The offer runs from September 13 to October 4, 2024.
MBK aims to acquire between 6.98% and 14.6% of Korea Zinc’s shares, with the belief that even a 7% acquisition could allow them to significantly influence the company’s policies. Under the deal, MBK would receive one more share than Young Poong and gain voting rights on Young Poong’s remaining shares after the transaction, enhancing its governance control.
The deal is intended to address corporate governance issues and enhance Korea Zinc’s corporate value, amid ongoing disputes among the company’s owners over a large-scale project focused on battery metals and renewable energy. This project is part of Korea Zinc's strategy to make zinc production more sustainable in the carbon-intensive metallurgy industry.
However, Korea Zinc opposes MBK’s bid, labeling it a "hostile takeover." Opposition party representatives in the South Korean parliament have also raised concerns about the deal.
MBK Partners, a private investment firm, has a portfolio worth over $30 billion and focuses on assets in North Asia, including South Korea, Japan, and China. Young Poong, a South Korean conglomerate, is one of the largest shareholders in Korea Zinc and specializes in high-purity zinc production used in various industrial applications.
