MBK Partners to raise tender offer price for Korea Zinc

Kim Kwang-il, Vice Chairman of MBK Partners, speaks about the background and reasons for the offer during a press conference regarding MBK Partners’ tender offer for Korea Zinc, held on the morning of the 19th at the Lotte Hotel in Jung-gu, Seoul. (Yonhap)

South Korean private equity firm MBK Partners and Young Poong Co., the largest shareholder of Korea Zinc Co., are set to raise the tender offer price to secure control of the non-ferrous metal smelting company.

With Korea Zinc‘s stock price already surpassing the previous tender offer price, the coalition aims to improve their chances of success by raising the price, thereby widening the gap with Korea Zinc Chairman Choi Yoon-beom.

According to sources from the investment banking (IB) industry on Wednesday, MBK Partners and Young Poong will raise their tender offer price for Korea Zinc from 660,000 won ($494.4) per share to 750,000 won starting on Thursday.

They will also increase the tender offer price for Young Poong Precision Corp., which holds a 1.85 percent stake in Korea Zinc, from 20,000 won per share to 25,000 won.

While the deadline has been extended by two days to October 6, the business day deadline remains unchanged at October 4.

MBK Partners and Young Poong initially announced plans to invest between 1.09 trillion won and 2.13 trillion won to acquire 6.9 percent to 14.6 percent of Korea Zinc shares and 43.43 percent of Young Poong Precision shares.

With the increase in tender offer prices, the total amount that MBK will invest is expected to be raised to between 1.25 trillion won and 2.44 trillion won.

On the same day, Young Poong disclosed that it will lend 300 billion won to MBK’s special purpose vehicle (SPC) Korea Corporate Investment Holdings that is leading the tender offer.

Korea Zinc Chairman Choi, in the meantime, is expected to consider countermeasures such as a competing tender offer to defend his management control.

He has been focusing on securing domestic and international partners who could act as allies in the latest management dispute.