Young Poong, MBK secure 5 percent stake in Korea Zinc

Private equity firm MBK Partners said on Monday that it had secured at least 5 percent of Korea Zinc.

From left, Young Poong President Kang Sung-doo and MBK Partners Vice Chairman Kim Kwang-il answer questions from the press at a conference in Seoul on Sept. 19. [YONHAP]

Young Poong and private equity firm MBK Partners have secured at least 5 percent of Korea Zinc, bringing the coalition's total stake to 38 percent, Yonhap reported Monday.

The move is the latest twist in the companies' long-running public feud over the management of the world's largest zinc smelter.

MBK Partners and Young Poong launched a month-long tender offer to acquire a controlling stake of up to 14.61 percent of the company on Sept. 12. The coalition has raised its offer price twice since then; it reached 830,000 won ($614) per share at its peak. The tender offer expired Monday.

In response, a special purpose company led by Korea Zinc Chairman Choi Yun-beom launched a counteroffer to buy back and cancel the company's own shares at a premium of 830,000 won per share, a bid that increased to 890,000 won per share on Oct. 11.

An official from a Korean financial investment firm expressed skepticism about a clear-cut victory for either side.

“I don't think it's going to be a clear-cut victory for one side or the other,” the official told Yonhap, predicting that the dispute could continue into early next year with rounds of ad hoc shareholder meetings and competitions for voting rights.

The coalition may be forced to extend its tender offer period to attract more interest if investors remain hesitant.

However, some analysts argue that extending the offer may not be sufficient to boost its popularity and that the coalition may need to focus on its strategy for the upcoming general shareholder meeting.

Korea Zinc's shares fell 1,000 won, or 0.13 percent, to close at 793,000 won on Monday, underperforming the Kospi's 1.02 percent gain.

BY KIM JU-YEON, YONHAP [kim.juyeon2@joongang.co.kr]