Korea Zinc takeover bid takes backward step as court rejects injunction

A Seoul court on Wednesday dismissed Young Poong’s injunction to prevent Korea Zinc from buying its own shares, effectively allowing the world’s largest zinc smelter’s controlling family to pursue a share buyback and hold onto management.

Korea Zinc's headquarters in Jongno District, central Seoul on Wednesday [YONHAP]

A Seoul court on Wednesday dismissed Young Poong’s injunction to prevent Korea Zinc from buying its own shares, effectively allowing the world’s largest zinc smelter’s chairman to pursue a share buyback and hold onto management.

Young Poong, the biggest shareholder of Korea Zinc, along with private equity firm MBK Partners, launched a public tender offer to gain control of the zinc producer in mid-September.

Young Poong was co-founded by the late Chang Byung-hee and the late Choi Ki-ho in 1949, while its affiliate, Korea Zinc, was founded in 1974. The Chang family has since managed Young Poong while the Choi family has headed Korea Zinc.

The two families began their management feud in 2022, after Korea Zinc’s incumbent Chairman Choi Yun-beom took office and began actively seeking partnerships with third parties, such as Hyundai Motor Group, to expand the firm’s portfolio into EV materials.

Young Poong and its allied MBK Partners, citing leadership issues within Korea Zinc, then launched a tender offer to buy a majority stake in the smelter from Sept. 13 to Oct. 4, and filed for a court injunction to prevent the zinc producer from acquiring shares during this period.

Korea Zinc has labeled the move a “hostile takeover” that could lead to a technology leakage to MBK Partners. It has vowed legal action against Young Poong and MBK.

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