Chairman Choi Yoon-beom's Side Secures 11.25% Stake Through Public Tender Offer
"Grab Floating Shares" Shareholders' Meeting Voting Rights Proxy Battle Expected
As a result of the public tender offer battle for control of Korea Zinc between Chairman Choi Yoon-beom of Korea Zinc and the Yeongpung-MBK Partners alliance, the difference in their shareholding ratios has narrowed to about 3 percentage points. Accordingly, the future management rights dispute is expected to shift to a full-scale battle for voting rights at the shareholders' meeting.
According to the Financial Supervisory Service's electronic disclosure system on the 28th, Korea Zinc secured a 9.85% stake (2,040,300 shares) through this tender offer, while Bain Capital acquired a 1.41% stake (291,272 shares).
Treasury shares originally cannot exercise voting rights, and Korea Zinc plans to cancel all the treasury shares it purchased this time as previously planned.
Therefore, the friendly shares additionally secured by Chairman Choi Yoon-beom's side through this treasury share tender offer amount to the 1.41% stake purchased by Bain Capital. As a result, the friendly shares on Chairman Choi's side increased from the existing 33.99% to 35.4%. The MBK alliance raised its stake to 38.47% through the earlier tender offer, making the gap between the two sides about 3%.
Although the competition for share acquisition through the tender offer has concluded for now, a voting rights battle over board control is expected to continue at the upcoming shareholders' meeting.
Once the cancellation of treasury shares purchased by Korea Zinc is completed, the total shares will decrease, resulting in the MBK alliance and Chairman Choi's side holding 43.9% and 40.4%, respectively. Since neither side secures a majority stake, fierce competition for shares through on-market purchases and friendly shares is anticipated.
Excluding friendly shares, the gap widens further based on the number of voting shares held by the largest and second-largest shareholders. Based on voting rights excluding treasury shares and the Kyungwon Cultural Foundation from the total issued shares, the largest shareholder alliance (MBK + Yeongpung) holds 43.9%, while the second-largest shareholder alliance (Choi family + Bain Capital) holds about 19.4%.
The MBK alliance plans to promptly request the convening of an extraordinary shareholders' meeting to secure management rights once the results of Korea Zinc's tender offer are announced. Accordingly, after the share expansion battle through the tender offer, the situation is expected to enter a full-scale shareholders' meeting voting rights confrontation phase.
Both sides offered contrasting interpretations of the tender offer results on the day.
The MBK alliance evaluated the result of Korea Zinc's treasury share tender offer, which secured 11.26%, by stating, "It has been confirmed that a majority of shareholders did not support the treasury share tender offer that caused losses to the company for the personal management rights maintenance of Chairman Choi Yoon-beom."
MBK argued, "The fact that many shareholders did not subscribe to the treasury share tender offer, which was 60,000 KRW per share higher than our tender offer price (830,000 KRW), means that many shareholders support and participate in MBK and Yeongpung's cause to restore the broken governance (decision-making structure) of Korea Zinc."
Korea Zinc stated on the day, "We plan to concretely finalize the treasury share cancellation schedule through the board of directors and proceed without any setbacks. We thank the shareholders and investors who trusted the legality of the treasury share tender offer and subscribed. We intend to quickly normalize management to repay the trust and support of the National Pension Service, business partners, shareholders, and collaborators," adding.
Meanwhile, on the same day, Korea Zinc opened the market on the Korea Exchange at 1,342,000 KRW, up 89,000 KRW (7.1%) from the previous trading day.
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