(2nd LD) MBK, Young Poong secure 5.34 pct stake in Korea Zinc in tender offer

Private equity firm MBK Partners and Young Poong Corp. said Monday they have secured a 5.34 percent stake in Korea Zinc Inc. in a multibillion-dollar tender offer to take control of the world's largest zinc smelter. In the tender offer that ended Monday, MBK and Young Poong, Korea Zinc's top shareholder, have attracted the 5.34 percent stake and will purchase the entire stake at 830,000 won (US$614) per share on Thursday, Young Poong said in a regulatory filing. On Sept. 12, MBK, in partnership with Young Poong, announced its intention to acquire a stake of up to 14.61 percent in Korea Zinc. Since then, the coalition has raised its offer price twice to 830,000 won a share. In response, Korea Zinc launched a counteroffer to buy back its own shares at a higher price, initially at 830,000 won per share and later increasing it to 890,000 won. In the counteroffer, Korea Zinc plans to repurchase its treasury stocks by Oct. 23 for cancellation to enhance shareholders' value. The company aims to secure up to 20 p ercent treasury shares at 890,000 won a share. Choi Yun-beom, chair of Korea Zinc Inc., speaks during a press conference in Seoul in this file photo taken Oct. 2, 2024. (Yonhap) Choi Yun-beom, chair of Korea Zinc Inc., speaks during a press conference in Seoul in this file photo taken Oct. 2, 2024. (Yonhap) "They (MBK-Young Poong coalition) seem to have failed to obtain the targeted stake in Korea Zinc. We will take a proper action (depending on responses from the coalition)," Korea Zinc said in a text message. On Monday, shares in Korea Zinc rose 0.13 percent to 793,000 won, underperforming the broader Korea Composite Stock Price Index's 1.02 percent gain. Given that MBK's offer price is lower than Korea Zinc's counteroffer, industry people expected the coalition to fall short of its acquisition target. MBK is one of North Asia's biggest buyout firms. However, experts have 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. Mentioning the takeover battle being "overheated," the Financial Supervisory Service, the country's financial regulator, warned last week any unfair trading practices would be investigated and punished. Source: Yonhap News Agency