Tender offer by MBK, Young Poong for Korea Zinc set to expire

A multibillion-dollar tender offer by private equity firm MBK Partners for a controlling stake in Korea Zinc Inc., the world’s largest zinc smelter, is set to expire Monday, with Korea Zinc shares trading below the offer price.

MBK Partners, in partnership with Young Poong Corp., Korea Zinc’s largest shareholder, announced its intention to acquire a stake of up to 14.61 percent in the company on Sept. 12. Since then, the coalition has raised its offer price twice, reaching 830,000 won (US$614) per share.

In response, Korea Zinc Chairman Choi Yun-beom launched a counteroffer to repurchase and cancel the company’s own shares at a higher price, initially at 830,000 won per share and later increasing it to 890,000 won.

Shares of Korea Zinc fell 0.13 percent to close at 793,000 won, underperforming the broader KOSPI’s 1.02 percent gain.

Given that MBK Partners’ offer price is lower than Choi’s counteroffer, industry insiders expect the coalition to fall short of its acquisition target.

However, experts said the coalition will be able to acquire less than a 10 percent stake due to financial and legal uncertainties surrounding Korea Zinc.

An official from a local financial investment firm expressed skepticism about a clear-cut victory for either side.

“I don’t think it’s going to be a clear-cut victory for one side or the other,” the official said, predicting that the dispute could continue into early next year with rounds of ad hoc shareholder meetings and competitions for voting rights.

If Korea Zinc’s share price closes above MBK Partners’ offer price on Monday, and investors remain hesitant, the coalition may be forced to extend its tender offer period to attract more interest.

However, some analysts argue that extending the offer may not be sufficient to boost its popularity, and the coalition may need to focus on its strategy for the upcoming general shareholders meeting.