[Exclusive] MBK and Youngpoong to Raise Tender Offer Price for 'Youngpoong Precision' on the 4th

Yeongpung and MBK Partners are once again raising the tender offer price for Yeongpung Precision on the 4th, the last day of the tender offer. This move is a counterattack against the competing tender offer by Choi Yoon-beom, chairman of Korea Zinc, with the adjusted price set above the 30,000 KRW proposed by Chairman Choi's side.

According to the financial investment industry on the 3rd, the Yeongpung-MBK alliance decided to raise the tender offer price for Yeongpung Precision once again, after previously increasing it from 20,000 KRW to 25,000 KRW. The current stock price of Yeongpung Precision is 25,450 KRW (closing price on the 2nd), which is above the tender offer price proposed by MBK.

Earlier, starting from the 2nd, the Choi family, including Chairman Choi Yoon-beom and Choi Chang-gyu, chairman of Yeongpung Precision, teamed up with the domestic private equity fund Jericho Partners to launch a competing tender offer for Yeongpung Precision. The tender offer price is set at 30,000 KRW per share, with the planned tender quantity being 3,937,500 shares, which is 2% of the total issued shares.

Yeongpung Precision holds a 1.85% stake in Korea Zinc, making it a key battleground in the Korea Zinc management rights dispute. Among the Jang family, including advisor Jang Hyung-jin of Yeongpung, and the Choi family, the side that secures a majority stake in Yeongpung Precision effectively gains 3.7% of Korea Zinc's voting rights. Currently, the Jang family holds 21.25% of Yeongpung Precision shares, while the Choi family holds 35.45%.

In terms of tender offer quantity, MBK and Yeongpung's side holds twice the amount of the Choi family. The Choi family plans to purchase only 25% of the total issued shares, whereas MBK and Yeongpung aim to acquire all remaining shares (43.43%) excluding the stakes held by the Jang and Choi families.

Without any minimum conditions on the tendered shares, Yeongpung Precision will purchase all shares tendered within a maximum range of 6,840,801 shares. The difference lies in that the Choi family will buy only part of the remaining shares, while MBK Partners will purchase all of them.

Meanwhile, Yeongpung and MBK plan to decide on raising the tender offer price for Korea Zinc after reviewing market conditions.

Korea Zinc's management announced on the 2nd that from the 4th to the 23rd, they will repurchase up to 15.5% of treasury shares, and their friendly party Bain Capital will secure up to a 2.5% stake through a competing tender offer. The strategy involves investing a total of 3.1 trillion KRW to potentially acquire an additional 18%. On the same day, Korea Zinc disclosed that it raised 2.7 trillion KRW through 400 billion KRW worth of commercial paper (CP) and loans from financial institutions.

Korea Zinc's decision to lead with a price of 830,000 KRW per share, higher than market expectations, is aimed at thwarting MBK's tender offer (750,000 KRW per share) which ends on the 4th. If Korea Zinc failed to secure at least an additional 6% friendly stake by that day and MBK's tender offer succeeded, management rights would have been transferred.

Korea Zinc also announced that it plans to cancel all treasury shares acquired through the tender offer. The company explained that repurchasing treasury shares itself acts as a dividend to shareholders, and canceling the repurchased treasury shares increases the relative value of the remaining shares, making it a shareholder-friendly policy. However, Korea Zinc also declared that if less than 5.87% of the total shares respond to the treasury share repurchase at 830,000 KRW per share, it will not proceed with the stock purchase at all.