"Strict Measures with a Zero-Tolerance Policy for Illegal Activities"
Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), pointed out on the 29th that "while healthy management rights competition arising from tender offers and mergers and acquisitions (M&A) processes should be left to market autonomy, the ongoing tender offer for the listed company (Korea Zinc) appears to involve overheated competition among the parties involved."
According to the FSS on the 29th, Governor Lee made this request regarding the recent concerns raised about the Korea Zinc tender offer during the deputy governor meeting held on the afternoon of the 27th.
At the meeting, Governor Lee emphasized that, considering market concerns, tender offerors, target companies, handling agents, and other related parties must adhere to the principles of fair competition. He particularly stressed the need for special attention to ensure that all procedures in the upcoming tender offer process are conducted lawfully.
Governor Lee instructed, "Closely monitor the market for any unfair trading activities such as the spread of baseless rumors or gossip related to the tender offer that could cause investors to make incorrect judgments or misunderstandings and disrupt market order. If necessary, promptly initiate investigations and apply a zero-tolerance policy to any illegal activities detected, taking strict measures."
He also added, "Although the stock price of the related securities has surged sharply in the short term, investors should verify the accurate facts through disclosure materials and decide on their investments carefully, as there is a risk of investment losses due to potential price declines afterward."
Korea Zinc, the world's number one non-ferrous metal company, has maintained a partnership with Youngpoong since its founding. However, on the 13th, Youngpoong announced a tender offer for 6.98% to 14.61% of Korea Zinc shares in collaboration with the domestic private equity fund MBK Partners, initiating a management rights dispute.
Korea Zinc is also preparing to defend its management rights by meeting domestic and foreign investors behind the scenes with Korea Investment & Securities and the Hanwha Group. Upholding its no-debt management policy, Korea Zinc has announced plans to issue commercial paper (CP) and held a press conference as part of its counterattack.
However, MBK and Youngpoong raised the tender offer price for Korea Zinc by 13.6% to 750,000 KRW per share. The funds required for the tender offer are expected to increase by 300 billion KRW to approximately 2.4396 trillion KRW. Amid this, both sides are escalating the tender offer competition through criminal complaints and public opinion battles.
Meanwhile, Korea Zinc's shares amount to 33.99%, including Chairman Choi Yoon-beom's stake. Youngpoong holds a similar level of shares at 31.13%. If Youngpoong succeeds in the tender offer together with MBK, it can secure management rights.
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