2 weeks Ago By Jackson Chen
Korea Zinc said on Monday it secured a 9.85% stake in the company via a tender offer that expired last week, as it seeks to fend off a takeover bid by private equity firm MBK and Young Poong. With this, shares controlled by Korea Zinc amount to a 12.
27% stake, it said in a filing. Bain Capital, which supports Korea Zinc’s current management, also secured a 1.41% stake in Korea Zinc, according to the filing.
“Korea Zinc has promised to enhance shareholder value by cancelling all treasury stocks it buys through this tender offer,” it said in a statement. Shares in Korea Zinc extended gains to rise as much as 7.5% on Monday, after hitting an all-time high last week on bets the company faces a lengthy takeover battle for a controlling stake in the world’s biggest zinc smelter, as the number of shares available to trade have shrunk due to tender offers from both sides.
Korea Zinc’s top shareholder Young Poong and private equity fund MBK Partners plan to call for an extraordinary shareholder meeting this year to seek approval to appoint board nominees, Kim Kwang-il, a partner at the fund, told Reuters previously, escalating the takeover battle. Despite Korea Zinc and Bain securing an additional 11.26% stake combined in the tender offer disclosed Monday, neither side has a majority stake in the case of a proxy fight, analysts said.
MBK and Young Poong – which is already Korea Zinc’s largest shareholder – secured a 5.34% additional stake in Korea Zinc earlier this month, increasing their stake to about 38.5%.
The stake favourable to Korea Zinc’s management is unknown as various shareholders widely viewed as sympathetic, such as Hyundai Motor, Hanwha Group and LG Chem have yet to publicly declare their stance. However, with the additional tender offer, analysts said the stake favourable to Korea Zinc is estimated at around 36%. South Korea’s National Pension Service (NPS), the world’s third-largest pension fund which held a 7.
83% stake in Korea Zinc at end-June, is expected to be a key casting vote. It has yet to disclose its stance. (By Joyce Lee and Heekyong Yang; Editing by Tom Hogue and Stephen Coates).
