MBK Partners and Yeongpung have secured more than a 5% stake through a tender offer in the management rights dispute of Korea Zinc.
According to the investment banking (IB) industry on the 14th, the MBK-Yeongpung alliance added more than a 5% stake in the Korea Zinc tender offer conducted until that day, closely approaching a majority based on voting rights.
MBK succeeded in gathering the targeted 5% stake. They stated, "Today will remain a significant milestone in the Korean capital market," and pledged to concentrate all efforts to halt the Korea Zinc treasury stock tender offer conducted by Chairman Choi Yoon-beom's side.
The MBK alliance secured a total stake of over 38%, adding to the existing approximately 33% stake. It is expected that they will engage in a 'vote battle' with Chairman Choi Yoon-beom's side at the upcoming shareholders' meeting.
In a statement released after completing the tender offer, MBK Partners said, "As the largest shareholder of Korea Zinc, MBK and Yeongpung will solidify management control and make every effort for Korea Zinc's sustainable growth and development through establishing transparent corporate governance."
They added, "First, we will focus all efforts on stopping Korea Zinc's treasury stock tender offer," and mentioned, "The large-scale treasury stock tender offer exceeding 3 trillion won through borrowing will cause irreparable damage to Korea Zinc."
Meanwhile, Korea Zinc will continue its treasury stock tender offer at 890,000 won until the 23rd. Korea Zinc plans to secure up to 17.5% of the total shares through the treasury stock tender offer. Its ally Bain Capital will separately tender for 2.5%.
The issue is that the treasury stocks Korea Zinc is tendering do not have voting rights. Also, since the treasury stocks are scheduled to be canceled, exchanging shares with friendly forces is impossible. Only the 2.5% that Bain Capital can secure at maximum through the tender offer has voting rights.
Furthermore, as the subscription volume entering through the treasury stock tender offer increases, the proportion of treasury stocks is excluded from the denominator in the voting rights calculation, which has the effect of increasing the voting rights proportion of competing shareholders.
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