Final closing of Youngpoong-MBK joint tender offer
Choi Yun-beom’s side begins purchasing the entire quantity at 830,000 won.
The dispute over Korea Zinc’s management rights, which is intensifying into a ‘war of jeon (錢)’, reaches a watershed on the 4th. The tender offer for Korea Zinc by Youngpoong and MBK Partners, which started last month, closes today, and the counter tender offer by Korea Zinc Chairman Choi Yoon-beom begins today. The outcome of the tender offer depends on Korea Zinc’s stock price. If the stock price on this day falls below the 750,000 won suggested by the Youngpoong-MBK joint venture, there is a high possibility that they will succeed in the tender offer and win. However, if Korea Zinc’s stock price exceeds 750,000 won, Chairman Choi Yoon-beom, who proposed the conditions for a full tender offer at 830,000 won per share, is more likely to win.
◆Korea Zinc and Youngpoong stock prices soar… MBK tender offer exceeds = As of 9:05 a.m. on the Korea Exchange stock market on the 4th, Korea Zinc is trading at 772,000 won, up 59,000 won (8.3%) from the previous trading day. As the stock price exceeded 750,000 won, there was a greater possibility that existing shareholders would not participate in MBK’s tender offer and side with Korea Zinc, which offered 830,000 won per share. It is analyzed that minority shareholders chose to participate in Chairman Choi’s tender offer as Korea Zinc Chairman Choi Yoon-beom threw in a card to purchase all of the company’s shares at a price of 830,000 won per share.
‘Management rights dispute’ Korea Zinc Chairman Choi Yoon-beom press conference Korea Zinc Chairman Choi Yoon-beom, who is involved in a management rights dispute with MBK Partners and Youngpoong, attended the Korea Zinc press conference held at the Grand Hyatt Hotel in Yongsan-gu, Seoul on the afternoon of the 2nd. From the left, President Park Ki-duk, Chairman Choi, and lawyer Cho Hyun-deok. Yonhap News Reporter Seo Dae-yeon
At the same time, the stock price of its affiliate, Youngpoong Precision, also showed a sharp rise. On this day, Youngpoong Precision’s stock price was trading at 30,100 won, up 18.2% (4,650 won) from the previous day. This can be interpreted as the effect of Youngpoong and MBK raising the tender offer price for Youngpoong Precision once again.
Korea Zinc decided through its board of directors meeting on the 2nd to make a tender offer of 3.2 million shares of its own stock at 830,000 won per share for 20 days from the 4th to the 23rd. According to the announcement, Chairman Choi and Bain Capital will make a tender offer for 1,215,283 to 3,726,591 shares (5.87 to 18.0%) of the company’s stock by the 23rd. The tender offer price is 10.67% higher than the Youngpoong-MBK joint venture. The total tender offer amount amounts to 3.1 trillion won, and the shares being tendered by Korea Zinc and Bain Capital Union are up to 18%. The lead securities company is Mirae Asset Securities.
Chairman Choi also announced that he would cancel all of the publicly purchased treasury shares, saying he would maximize the profits of minority shareholders. This is interpreted as a defense against the Youngpoong-MBK alliance’s attack that ‘Korea Zinc’s share purchase is a breach of trust.’
However, uncertainty remains regarding Korea Zinc’s treasury stock tender offer as Youngpoong applied for a temporary injunction to suspend the tender offer process for the purpose of acquiring Korea Zinc’s treasury stock. In a separate case from the preliminary injunction that was dismissed on the 2nd, Youngpoong and MBK claim that the company is causing losses, such as an increase in debt ratio due to a decrease in equity capital.
Accordingly, Ki-deok Park, CEO of Korea Zinc, said, “Korea Zinc clearly has profits available for dividends of more than 6 trillion won legally and accounting, and through this, it is possible to buy back shares.” He added, “Young Poong’s second injunction is a ‘rehash’ that ignores the previous court ruling. “He criticized. In addition, CEO Park said, “Korea Zinc’s purchase of the entire amount related to the tender offer of its own shares is an official matter and is subject to application by the Financial Supervisory Service and approval by the Board of Directors.” He added, “Korea Zinc clearly confirms that it will purchase the entire amount in accordance with the approval of the Board of Directors and as stated in the Financial Supervisory Service application and notice.” “We do it,” he emphasized.
◆MBK, pay attention to whether the tender offer will be raised = Meanwhile, as Korea Zinc’s stock price rose higher than the 750,000 won suggested by MBK during the day on the 4th, the incentive for investors to respond to the tender offer disappeared, raising the possibility that the minimum quantity would not be met. Accordingly, attention is focused on whether MBK will further increase the tender offer price during the day.
Previously, MBK raised the tender offer price for Korea Zinc from 660,000 won to 750,000 won. If MBK changes the tender offer conditions, the tender offer closing period will be extended by 10 days. However, if MBK raises the price once more, it will cost hundreds of billions of won in additional funds, and even if it succeeds in taking over management rights, the fact that it will not be easy to recover the investment is expected to be a burden.
Reporter Kim Young-sook kys@naeil.com
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