Korea Zinc makes last-ditch efforts to thwart tender offer by MBK, Young Poong


The head of Korea Zinc Inc., the world’s largest zinc smelter, has been making last-ditch efforts to thwart a tender offer by private equity firm MBK Partners and Young Poong Corp., the smelter’s biggest shareholder, industry sources said Monday.

Korea Zinc Chairman Choi Yun-beom met senior executives of business partners in Japan, Hong Kong and Singapore last week to seek a potential white knight to come to the smelter’s aid in the management battle, according to the sources.

In collaboration with Young Poong, MBK Partners has announced plans to acquire up to a 14.6 percent stake in Korea Zinc through a 2 trillion-won (US$1.5 billion) tender offer, aiming to consolidate control.

Currently, Young Poong holds a 33 percent stake, while Korea Zinc and its owner family collectively own 18 percent.

This file photo take Nov. 15, 2023, shows Choi Yun-beom, chairman of Korea Zinc Inc., speaking during an event in the southeastern city of Ulsan. (Yonhap)

This file photo take Nov. 15, 2023, shows Choi Yun-beom, c
hairman of Korea Zinc Inc., speaking during an event in the southeastern city of Ulsan. (Yonhap)

In response, Choi has been actively expanding his moves to seek support from domestic and international allies, according to the sources.

During a recent trip across Asia from Sept. 16-18, Choi met with executives from major companies and global private equity firms, including Japan’s Softbank and Sumitomo Corp.

In particular, Choi’s meeting with Softbank has sparked speculation about whether the Japanese investment giant could play a role in Korea Zinc’s defense strategy.

Korea Zinc has a history with Softbank, having participated in the Japanese firm’s 2022 investment in Swiss energy storage company Energy Vault.

In a letter to his employees during the Chuseok holiday last week, the Korea Zinc chairman expressed confidence in Korea Zinc’s ability to fend off the takeover attempt.

“I had no problem communicating with foreign companies despite the Chuseok holiday. I worked day and night to devise plans with
the help and encouragement of many grateful people,” he wrote. “I was able to find a way to win this battle.”

Choi has also met with Vice Chairman Kim Dong-kwan of Hanwha Group, a defense-to-energy conglomerate in South Korea, which holds a 7.76 percent stake in Korea Zinc.

Industry insiders suggest that Korea Zinc may launch its own tender offer with a budget of 1 trillion won, as a way to outbid MBK Partners’ offer.

Source: Yonhap News Agency