[Special Stock] Korea Zinc Share Price Wilts... Once Falls Below 700,000 Won Level

The stock price of Korea Zinc, which is embroiled in a management rights dispute, is on a downward trend despite expectations of a counter tender offer.

As of 9:09 a.m. on the 30th, it was trading at 705,000 won on the KOSPI market, down 6,000 won (0.84%) from the previous trading day.

The market opened at 703,000 won, down 8,000 won from the previous day, and at one point fell to 699,000 won, breaking below the 700,000 won level.

It is reported that Chairman Choi Yoon-beom’s side of Korea Zinc is preparing to counter with a rival tender offer while simultaneously pursuing a strategy of defending by repurchasing treasury shares. In the capital market, there are expectations that Korea Zinc will mobilize more than 1 trillion won to buy back treasury shares at a price slightly higher than the tender offer price proposed by MBK.

Earlier, MBK filed a provisional injunction with the court requesting that Korea Zinc and its affiliates be prevented from purchasing treasury shares while starting the tender offer. The Capital Markets Act prohibits tender offerors and their special related parties from increasing their stakes by methods other than the tender offer during the tender offer period to prevent possible stock price manipulation.

Using treasury shares for purposes other than cancellation to enhance shareholder value contradicts the government’s recent value-up policy. However, in reality, Chairman Choi must gather even a small additional stake to defend management rights against Youngpoong and MBK Partners, who are attempting to enter the board by raising allegations of breach of duty.

Treasury shares do not have voting rights, but they can be exchanged with friendly companies’ shares. If other companies such as Hyundai Motor and Hanwha assist, friendly stakes can be secured through treasury share exchanges, and voting rights can be restored.