MBK Alliance's 'Shadow Strategy' on Korea Zinc... Buying Even One Share at '830,000 Won per Share'

MBK Partners and Youngpoong's Bold Move: '830,000 KRW per Share' and 'Removal of Minimum Purchase Quantity Condition'
Direct Response to Illegal Self-Share Buyback by Chairman Choi Yoon-beom
"We Will Definitely Restore the Damaged Corporate Governance of Korea Zinc"

MBK Partners and Youngpoong made a decisive move on the last day of the public tender offer period for Korea Zinc by changing the tender offer price and conditions once again. They matched the price and minimum purchase tender offer conditions set by Chairman Choi Yoon-beom of Korea Zinc. As the MBK alliance revised the conditions during the tender offer period, the period was extended by 10 days to the 14th. This makes the MBK alliance's tender offer period end earlier than Korea Zinc's own share buyback period, which runs until the 23rd, giving MBK a relative advantage. Both sides agreed to remove the minimum purchase conditions, signaling that the management dispute is likely to prolong through the shareholders' meeting and board of directors.

On the 4th, the MBK-Youngpoong alliance increased the tender offer price from the previous 750,000 KRW to 830,000 KRW, a 10.7% increase, and abruptly removed the minimum purchase quantity, which was about 7% of the total issued shares.

The MBK alliance explained, "As the largest shareholder, even if the subscription volume does not reach the maximum purchase target (about 14.6% of the total issued shares), we intend to purchase all subscribed shares and, together with the largest shareholder Youngpoong, restore the damaged corporate governance of Korea Zinc."

MBK Vice Chairman Kim Kwang-il said, “Due to Chairman Choi’s highly questionable self-share tender offer, the legitimate tender offer by MBK Partners and Youngpoong, the largest shareholders of Korea Zinc, was obstructed. We believe more time is needed for the market to fully recognize and understand that Chairman Choi’s self-share tender offer carries many legal risks such as breach of fiduciary duty and causes financial harm to the company and remaining shareholders, which is why we decided to change the conditions.”

Vice Chairman Kim added, “Although the previous 750,000 KRW per share was recognized as a sufficient premium, there is a price difference compared to 830,000 KRW per share. By matching the price, we aimed to reduce the burden on existing investors. Above all, whether one share or three million shares come in, we will purchase all to firmly restore Korea Zinc’s corporate governance and recover the severely damaged corporate and shareholder value.”

MBK Partners and Youngpoong submitted an amended tender offer report to the Financial Supervisory Service on the afternoon of the 4th. With the price and conditions changed, the tender offer period for Korea Zinc by MBK Partners and Youngpoong is extended by 10 days until the 14th.

The increased tender offer price of 830,000 KRW for Korea Zinc is 23.5% higher than the all-time high of 672,000 KRW since listing, and applies a premium of 60.6% and 66.5% over the volume-weighted average prices for the 3-month and 6-month periods before the initial tender offer date (516,735 KRW and 498,368 KRW, respectively). It is 49.3% higher than the closing price of 556,000 KRW for the 12 days immediately before the tender offer and 49.0% higher than the 52-week high closing price of 557,000 KRW.

The maximum purchase quantity for the Korea Zinc tender offer by MBK Partners and Youngpoong is 3,024,881 shares (about 14.6% of the total issued shares). Even if the number of subscribed shares is less than the maximum purchase quantity, all subscribed shares will be purchased. If subscriptions exceed the maximum purchase quantity, shares will be purchased on a pro-rata basis up to the maximum quantity.

MBK cited securities industry insiders to emphasize that it is more advantageous to respond to MBK’s tender offer than to Korea Zinc’s self-share purchase in this tender offer. MBK stated, “Along with the price increase, investors will welcome the removal of the minimum purchase quantity condition, which was considered a hurdle. Chairman Choi Yoon-beom’s self-share tender offer remains uncertain due to pending court decisions citing breach of fiduciary duty and other reasons, as well as controversies over illegal acquisition exceeding the self-share purchase limit. From a tax perspective, subscribing to the tender offer by MBK Partners and Youngpoong is safer and more reasonable.”

The securities firm handling the tender offer for MBK and Youngpoong is NH Investment & Securities. Shareholders of Korea Zinc and Youngpoong Precision can participate in the tender offer through NH Investment & Securities branches, website, Home Trading System (HTS), or Mobile Trading System (MTS) until October 14.