MBK, Young Poong further sweeten tender offer price for Korea Zinc to 2.5 tln won

Private equity firm MBK Partners and Young Poong Corp. further raised a tender offer price Friday to 2.5 trillion won (US$1.89 billion) to gain a controlling stake in Korea Zinc Inc., sending shares of the world’s biggest zinc smelter to a record high.

MBK and Young Poong raised their offer price for Korea Zinc to 830,000 won per share, they said in a regulatory filing.

The move came on the last trading day before the tender offer was set to expire. With the offer price raised, the tender offer was extended until Oct. 14.

The latest offer price is on par with a counteroffer price by Korea Zinc Chairman Choi Yun-beom.

MBK, in cooperation with Young Poong, the largest shareholder of Korea Zinc, raised its original tender offer price for Korea Zinc last week to 750,000 won per share from 660,000 won.

In a rare counteroffer this week, Korea Zinc Chairman Choi Yun-beom said the company decided to repurchase and cancel its own shares at a price of 830,000 won per share, starting from Friday and running until Oct. 23.

Shares of Korea Zinc surged 8.84 percent to close at 776,000 won Friday.

In a regulatory filing Friday, Korea Zinc said it will spend its own 1.5 trillion won and borrow another 1.16 trillion won for the counteroffer.

The battle for management control of Korea Zinc has heated up as MBK teamed up with Young Poong and launched the public tender offer in mid-September to acquire a stake of up to 14.61 percent in the smelter.

Young Poong and investors supportive of it controlled a 33.13 percent stake, while Choi, the chairman of Korea Zinc, and his supporting investors controlled a 33.99 percent stake, according to industry sources.

The ongoing conflict marks the end of decadeslong cooperation between Young Poong and Korea Zinc, which were co-founded in 1974 by Chang Byung-hee and Choi Ki-ho.

Since the founding, the Choi family has managed Korea Zinc, while the Chang family is in charge of Young Poong and other electronic parts affiliates.

Tensions escalated in 2022, when Choi Yun-beom, grandson of co-founder Choi Ki-ho, became chairman of Korea Zinc and sought to separate the company from Young Poong, sparking the current battle for control.