Strengthening Management Control and Improving Corporate Governance through Tender Offer
27.7% and 30.1% Premium on 3-Month and 6-Month Average Closing Prices
Minimum Purchase Volume Approximately 7% of Total Issued Shares
Review of Allegations and Issues Raised Against Chairman Choi Yoonbeom, Management Agent
MBK Partners, together with Yeongpung, is pushing forward with a public tender offer for the listed circulating shares of Korea Zinc.
On the 13th, MBK Partners’ special purpose company (SPC) ‘Korea Corporate Investment Holdings Co., Ltd.’ and ‘Yeongpung Co., Ltd.’ announced the filing of a tender offer report and stated that they will conduct a public tender offer for shares of Korea Zinc on the Korea Exchange to strengthen management control.
MBK Partners, which became the largest shareholder of Korea Zinc together with Yeongpung through a shareholder agreement on the 12th, explained that the purpose of the tender offer is to acquire additional shares, solidify management control, and improve Korea Zinc’s governance and corporate value, which have been damaged due to the typical “Agency Problem.”
The tender offer price is KRW 660,000 per share, which applies a premium of 27.7% and 30.1% to the volume-weighted average price (VWAP) of KRW 516,735 and KRW 507,393 over the previous 3 and 6 months, respectively. This price is 18.7% higher than the closing price on the 12th and 18.5% higher than the 52-week high of KRW 557,000.
The shares subject to the tender offer are registered common shares of Korea Zinc Co., Ltd., with a minimum of 1,445,036 shares (approximately 7% of the total issued shares of 20,703,283 shares) and a maximum of 3,024,881 shares (approximately 14.6% of the total issued shares).
If the number of shares tendered is less than the minimum purchase quantity, MBK Partners and Yeongpung will not purchase all the tendered shares. If the number exceeds the maximum purchase quantity, they will purchase only up to the maximum quantity on a pro-rata basis.
This tender offer price corresponds to the highest target prices suggested by major securities firms and is expected to provide existing investors with an excellent opportunity to realize trading profits if they participate in the subscription.
The tender offer period is from today (September 13) until October 4 (settlement date October 10).
Following the procedures under the Commercial Act, MBK Partners and Yeongpung will review the issues and allegations raised regarding Chairman Choi Yoon-beom, who is a management agent and a 2.2% shareholder, and will take necessary measures in the interest of all shareholders. Chairman Choi Yoon-beom has been criticized for distorting governance, paralyzing board functions, and damaging the company’s financial soundness and future corporate value in order to expand his control despite holding only a minority stake, even though he owes a fiduciary duty to all shareholders of Korea Zinc.
MBK Partners stated, “The review of the allegations and issues concerning Chairman Choi is separate from the efforts made by other members of the Korea Zinc board and management for the company’s growth and development. We will increase Korea Zinc’s corporate value for the benefit of all shareholders, including the Choi family, and further strengthen and develop business partnerships with Hyundai Motor, LG, and Hanwha.”
Meanwhile, MBK Partners, as a major shareholder of Korea Zinc, will simultaneously conduct a public tender offer for Yeongpung Precision, a key affiliate, through Korea Corporate Investment Holdings Co., Ltd. to secure and strengthen management control.
The tender offer price is KRW 20,000 per share, and all shares tendered within the maximum of 6,840,801 shares (approximately 43.43% of the total issued shares) will be purchased without any minimum condition. All circulating shares excluding those held by Yeongpung and the Choi family are subject to the tender offer.
After securing management control of Yeongpung Precision, MBK Partners plans to focus on and invest in Yeongpung Precision’s core business together with the existing management to lead long-term sustainable growth. NH Investment & Securities is the handling securities firm for this tender offer. Shareholders of Korea Zinc and Yeongpung Precision can participate in the tender offer through NH Investment & Securities branches, website, Home Trading System (HTS), or Mobile Trading System (MTS) until October 4.
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