[Special Stock] 'Management Dispute' Korea Zinc Soars 21%... MBK Partners' Tender Offer

Choi and Jang Families' 75-Year Partnership Collapse
Plan to Secure Majority Stake with Up to 2 Trillion Won Public Buyout

The stock price of Korea Zinc, whose 75-year partnership system has collapsed, surged 21%. It appears that the private equity fund (PEF) management company MBK Partners, after teaming up with Youngpoong and becoming the largest shareholder, has significantly influenced the stock price by pushing for a public tender offer worth up to 2 trillion won.

As of 9:05 a.m. on the 13th, Korea Zinc was trading at 676,000 won, up 21.58% (120,000 won) from the previous close. This is a 52-week high. Additionally, the stock briefly surpassed 690,000 won in early trading, exceeding the highest price since 2022, which was 685,000 won in November 2022.

On the previous day, MBK Partners signed a shareholder agreement with Korea Zinc’s largest shareholder Youngpoong and the Jang family to jointly exercise voting rights. Under this agreement, MBK Partners was granted a call option (purchase right) on part of Korea Zinc’s shares, allowing them to secure one more share than the combined holdings of Youngpoong and the Jang family. Youngpoong and the Jang family hold a total of 33.13% of Korea Zinc’s shares, which is similar to Korea Zinc’s own stake of 33.99%.

Korea Zinc was founded by the late founders Jang Byung-hee and Choi Ki-ho and is a core affiliate of the Youngpoong Group. The Choi family has been responsible for Korea Zinc, while the Jang family has managed Youngpoong Group and its electronics affiliates. The partnership spirit of “Youngpoong is managed by the Jang family, Korea Zinc by the Choi family” has lasted for 75 years until this year. However, this alliance began to crack during the third-generation leadership, and conflicts intensified when the Fair Trade Commission demanded improvements in chaebol governance from 2017 to 2019, leading to the dissolution of circular shareholdings. As a result, the two families have come to a point of fighting over shares to secure management rights of Korea Zinc.

On the 13th, MBK Partners announced that, together with Youngpoong, they would conduct a public tender offer for Korea Zinc shares from that day until July 4. The target quantity for the tender offer is 7% to 14.6% of Korea Zinc’s shares (1,445,036 to 3,024,881 shares). The tender offer price is 660,000 won per share, which includes an 18.7% premium over the previous day’s closing price of 556,000 won. The total scale is up to 2 trillion won. If the tender offer is completed as planned, MBK Partners and Youngpoong will secure a majority stake.