Korea Zinc Chairman and Bain Capital Secure 11.26% Stake in Buyback
Sunday, Oct 27, 2024 8:26 pm ET
1min read In a strategic move to defend its management rights against a hostile takeover bid, Korea Zinc, in collaboration with its ally Bain Capital, has successfully acquired a significant stake in the company through a public tender offer. The buyback, which concluded on October 23, saw the duo secure a combined 11.26% stake in Korea Zinc, further solidifying their position against the MBK Partners-Young Poong consortium's takeover attempt.
Korea Zinc, the world's largest zinc smelter, announced through a disclosure on the Financial Supervisory Service's electronic disclosure system that it had purchased 2,331,302 shares, equivalent to 11.26% of the total shares, through the public tender offer. The company initially aimed to thwart the MBK consortium's tender offer by proposing a higher buyback price of 890,000 won per share, intending to acquire up to approximately 20% of the circulating shares. However, the MBK consortium had already secured a 5.34% stake through its tender offer, which concluded on October 14, reducing the available circulating shares and resulting in fewer subscriptions to Korea Zinc's tender offer than targeted.
The MBK consortium, having raised its stake to 38.47% through its earlier tender offer, now holds a stake approximately 3% higher than Choi's side. Once Korea Zinc cancels the acquired treasury shares, the total number of shares will decrease, effectively raising the stakes of both the MBK consortium and Choi's side to approximately 43% and 40%, respectively. However, as neither side holds a majority stake, a fierce competition for shares through market purchases and friendly stakes is anticipated.
The MBK consortium is expected to swiftly demand an extraordinary general meeting once the results of Korea Zinc's tender offer are announced, aiming to secure management rights. This move is likely to lead to a full-scale voting rights showdown at the upcoming general meeting, following the battle for stake expansion through tender offers.
In conclusion, the successful buyback by Korea Zinc Chairman Choi Yoon-beom and Bain Capital has strengthened their position against the MBK consortium's takeover bid. As the competition for shares intensifies, the upcoming general meeting is expected to be a critical turning point in the ongoing feud for control of Korea Zinc.
Korea Zinc, the world's largest zinc smelter, announced through a disclosure on the Financial Supervisory Service's electronic disclosure system that it had purchased 2,331,302 shares, equivalent to 11.26% of the total shares, through the public tender offer. The company initially aimed to thwart the MBK consortium's tender offer by proposing a higher buyback price of 890,000 won per share, intending to acquire up to approximately 20% of the circulating shares. However, the MBK consortium had already secured a 5.34% stake through its tender offer, which concluded on October 14, reducing the available circulating shares and resulting in fewer subscriptions to Korea Zinc's tender offer than targeted.
The MBK consortium, having raised its stake to 38.47% through its earlier tender offer, now holds a stake approximately 3% higher than Choi's side. Once Korea Zinc cancels the acquired treasury shares, the total number of shares will decrease, effectively raising the stakes of both the MBK consortium and Choi's side to approximately 43% and 40%, respectively. However, as neither side holds a majority stake, a fierce competition for shares through market purchases and friendly stakes is anticipated.
The MBK consortium is expected to swiftly demand an extraordinary general meeting once the results of Korea Zinc's tender offer are announced, aiming to secure management rights. This move is likely to lead to a full-scale voting rights showdown at the upcoming general meeting, following the battle for stake expansion through tender offers.
In conclusion, the successful buyback by Korea Zinc Chairman Choi Yoon-beom and Bain Capital has strengthened their position against the MBK consortium's takeover bid. As the competition for shares intensifies, the upcoming general meeting is expected to be a critical turning point in the ongoing feud for control of Korea Zinc.
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