Korea Zinc Shares Jump as Pension Fund Backs Some CEO Proposals
Sunday, Jan 19, 2025 9:17 pm ET
1min read Korea Zinc Company, Ltd. (KRX:010130) shares surged on Monday after the National Pension Service (NPS) announced its support for two key proposals by the company's management. The NPS, which holds a 4.51% stake in Korea Zinc, agreed to back proposals to adopt a cumulative voting system for director elections and cap the total board size at 19 members. This endorsement is expected to bolster the position of Korea Zinc Chairman Choi Yun-beom, who is facing a takeover attempt by Young Poong and private equity firm MBK Partners.
The cumulative voting system allows Choi's camp and other minority shareholders to pool their votes and appoint some new directors, making it harder for Young Poong-MBK to take control of the board. The proposed 19-member cap on the board is also seen as favorable to Choi as it could disrupt Young Poong-MBK's plan to introduce 14 new candidates to secure a majority. The board is currently composed of 12 directors, with Korea Zinc proposing an additional seven members and the Young Poong camp pushing for 14.
The NPS's decision comes as Korea Zinc is set to hold an ad hoc shareholders meeting next week to discuss issues related to the company's management and future direction. The meeting is expected to be a crucial event in the ongoing control battle between Korea Zinc's management and the Young Poong-MBK alliance.
Korea Zinc's share price has been volatile in recent months due to the management tussle and market disruption caused by the takeover attempt. The NPS's endorsement is likely to have a significant impact on the company's share price and investor sentiment, as it signals support for the current management's proposals and strategy.
Investors will be closely watching the upcoming shareholders meeting and the potential outcome of the control battle between Korea Zinc's management and the Young Poong-MBK alliance. The result of the meeting could have significant implications for the company's long-term strategy and shareholder value.
In conclusion, the NPS's endorsement of Korea Zinc's proposals is a significant development in the ongoing control battle between the company's management and the Young Poong-MBK alliance. The cumulative voting system and board size cap are expected to strengthen Choi Yun-beom's position and disrupt Young Poong-MBK's takeover attempt. Investors will be closely watching the upcoming shareholders meeting and the potential outcome of the control battle, as it could have significant implications for the company's long-term strategy and shareholder value.
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