Yeongpung·MBK Propose Public Tender Offer at 660,000 KRW per Share
"Attempt to Seize Management Rights... Concerns Over Stakeholders' Interest Damage"
Korea Zinc has expressed its opposition to the tender offer for shares by its largest shareholder, Youngpoong, and MBK Partners.
On the 13th, Korea Zinc stated in its opinion statement regarding the tender offer, "The tender offer is being conducted unilaterally by our largest shareholder, Youngpoong Co., Ltd., in collusion with corporate raider MBK Partners, without any prior consultation or discussion with our company," adding, "We consider this tender offer attempt as a hostile and predatory merger and acquisition (M&A) by corporate raiders targeting our company, which holds the world's number one market share competitiveness in the non-ferrous metal manufacturing sector, a national key industry."
The day before, MBK Partners, which joined as the largest shareholder of Korea Zinc through a shareholder agreement with Youngpoong, announced that it would launch a tender offer for Korea Zinc shares through a special purpose company (SPC) called 'Korea Corporate Investment Holdings Co., Ltd.'
Korea Zinc explained, "Youngpoong has been unable to process sulfuric acid, a byproduct naturally generated during zinc production, on its own and has had our company handle sulfuric acid processing for over 20 years. When we refused to renew the sulfuric acid processing agency contract after its expiration for safety reasons, Youngpoong filed an injunction with the court, claiming that the operation of the Seokpo smelter is impossible without our sulfuric acid processing services."
It added, "Jang Hyung-jin, who failed in managing Youngpoong, is attempting to seize our management rights against the will of the current management team, whose management capabilities have been proven by maintaining a leading position in the global market for 50 years," and criticized, "This tender offer could negatively impact our company's mid- to long-term corporate value and seriously harm the interests of stakeholders, including minority shareholders."
Regarding MBK Partners, Korea Zinc stated, "They have repeatedly engaged in predatory management practices such as acquiring market-competitive companies and then recovering investments by selling core assets or receiving excessive dividends. There are numerous cases where they have negatively affected company employees and local communities and undermined corporate value through unfair workforce restructuring," and pointed out, "If such a private equity fund acquires our management rights, it will cause enormous damage to members, local communities, and stakeholders, and is highly likely to pursue arbitrary management strategies that go against the interests of all shareholders and members."
Korea Zinc concluded, "Under the leadership of the current management, we will strive for sustainable growth while enhancing shareholder value through various shareholder return policies and contributing to employees and local communities," and added, "We ask all stakeholders, including shareholders, for their continued trust and support for our company."
MBK Partners and Youngpoong are promoting a tender offer for Korea Zinc common shares at 660,000 KRW per share from today until October 4. Out of a total of 20,703,283 issued shares, the minimum purchase quantity is 1,445,036 shares (about 7% of total issued shares) and the maximum is 3,024,881 shares (about 14.6% of total issued shares). If the number of shares tendered is less than the minimum purchase quantity, none of the tendered shares will be purchased, and if it exceeds the maximum purchase quantity, only the maximum purchase quantity will be purchased on a pro-rata basis. Also, a tender offer will be conducted for Youngpoong Precision, a major affiliate, for the purpose of securing and strengthening management rights.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
