Korea Zinc Shares Surge as Hostile Takeover Battle Intensifies

Shares of Korea Zinc Co., the world’s largest zinc smelter, surged by the maximum daily limit on Monday, following news that the company’s board will meet soon to discuss the potential calling of an extraordinary shareholder meeting. The meeting, set for January 23, 2025, could result in a crucial vote to elect a new set of directors proposed by the company’s largest shareholders. The ongoing battle for control of Korea Zinc has captured the attention of investors and industry analysts alike, with significant implications for the global zinc market and the company’s future role in the energy transition.

The stock price of Korea Zinc shot up by as much as 29-30% during Monday's trading, hitting its highest level since October 24. This surge follows reports that the board will likely schedule a meeting next month to decide on a vote for a new board of directors, led by a consortium of major shareholders, including Young Poong Corp. and private equity firm MBK Partners Ltd. The two groups are aggressively pushing to oust the current management, led by Chairman Yun B. Choi, and take control of the company.

The conflict began earlier this year when the MBK-Young Poong alliance launched a hostile takeover bid, acquiring a 39.83% stake in Korea Zinc. In response, Korea Zinc’s management initiated a share buyback program, which allowed Chairman Choi’s faction to increase its stake to just over 34%. Despite this, the battle for dominance within the company remains unresolved, with both sides preparing for a pivotal shareholder vote in January.

This struggle for control has broader ramifications, particularly for the global metal markets. Korea Zinc is a critical player in the zinc industry, a key metal used in various applications, including the production of batteries, electric vehicles, and renewable energy systems. As the world accelerates its transition to green energy, the demand for zinc has surged, making the company’s future strategy and leadership more significant.

During the battle, Young Poong Corp.’s own shares also experienced a notable increase. The company’s stock rose by as much as 24% during the morning session, before settling to a 10% gain. The surge in Young Poong’s share price underscores investor optimism that the consortium will succeed in its bid to take control of Korea Zinc.

The broader South Korean stock market, as measured by the Kospi index, also saw a modest rise of 0.4% during the same period, suggesting that the intense corporate drama surrounding Korea Zinc is reverberating across the market.

As Korea Zinc’s leadership dispute nears its climax, all eyes will be on the company’s extraordinary shareholder meeting next month. The outcome of the vote will determine not only the future direction of Korea Zinc but also its strategic role in supplying critical materials needed for the global energy transition. Investors and industry players alike will be watching closely, as the stakes for both the company and the global market are higher than ever.