Korea Zinc acquisition war hits pivotal deadline: Key developments expected

A monthlong struggle for control of Korea Zinc, the largest zinc smelter globally, is set to reach a critical juncture on Monday, as a tender offer from a consortium led by its largest shareholder approaches its expiration.

Young Poong Corp. and private equity firm MBK Partners have proposed a bid of 830,000 won ($612.30) per share for up to 14.61% of Korea Zinc's outstanding stock. This offer, which has been revised upward twice, will conclude at 3:30 p.m. local time. As the deadline looms, all eyes are on the potential implications for the company's future governance and strategy.

In response to the ongoing bidding war, Korea Zinc Chairman Choi Yun-beom raised his counteroffer to 890,000 won per share on Friday, a move that reflects the intense competition for control of the company. This new offer has garnered support from U.S. investment firm Bain Capital, which adds significant backing to Choi's strategy.

By increasing the bid, Choi aims to secure a stronger position against the consortium led by Young Poong Corp. and MBK Partners, which had initially offered 830,000 won per share for up to 14.61% of the company's stock. The escalation in offers highlights the high stakes involved in this takeover battle, as both sides vie for control of Korea Zinc, which is crucial not only for its substantial market presence but also for its future direction and growth prospects. The developments in this situation will be closely monitored as the tender offer deadline approaches, with potential ramifications for shareholders and the broader zinc industry.

Analysts anticipate that Young Poong Corp. and MBK Partners may fall short of their acquisition target, potentially securing only a single-digit percentage stake in Korea Zinc. The outcome of this intense bidding battle remains uncertain, influenced by various factors, including tax implications for investors and ongoing legal challenges. These complexities could affect investor sentiment and decision-making, ultimately shaping the results of the tender offer. As the deadline approaches, the dynamics of this situation will be critical for understanding the future ownership and governance of Korea Zinc.

Korea Zinc will extend its public tender offer until October 23, with the goal of acquiring up to 17.5% of the company's total shares. In addition, Bain Capital is pursuing a separate initiative to purchase an additional 2.5% stake. This coordinated effort underscores the commitment of both Choi Yun-beom and Bain Capital to strengthen their influence within the company, as they navigate the competitive landscape of this acquisition battle. The outcome of these moves will be pivotal in shaping the future governance and strategic direction of Korea Zinc.

Analysts predict that disputes surrounding the takeover battle for Korea Zinc will persist until the regular shareholder meeting season in March next year. This protracted timeline suggests ongoing contention as stakeholders navigate complex negotiations and strategic maneuvers. The situation could lead to heightened tensions and further developments in the lead-up to the meetings, where key decisions regarding the company's future governance and direction will be addressed.