Korea Zinc takes control of key shareholder in management feud with MBK

Korea Zinc Inc. succeeded in taking control of Young Poong Precision Corp., a key player in the management battle against North Asia-focused private equity firm MBK Partners Ltd., through a tender offer.

Jerico Partners Co. founded by Korea Zinc Chair Choi Yun-birm and his family members secured a 34.9% stake in Young Poong Precision, or 5.49 million shares, through the tender offer as of Monday, according to KB Securities Co., which managed the deal.

That raised the combined stake held by Choi’s family members to 70.35%.

Young Poong Precision holds a casting vote with a 1.85% stake in Korea Zinc in the management dispute. MBK could have secured a 3.7% voting stake in the world’s largest zinc and lead smelter if the private equity firm had taken control of Young Poong Precision.

MBK, which concluded its tender offer for Young Poong Precision on Oct. 14, obtained only 0.01%, or 830 shares.

Korea Zinc ramped up its tender offer price for the company to 35,000 won ($25.4) apiece from the initial 30,000 won per share, while MBK maintained its 30,000 won offer.

Young Poong Precision’s shares lost 17.5% to end at 20,500 won on South Korea’s junior Kosdaq after tumbling to 20,300 won on Tuesday, their lowest since Sept. 23, with the two tender offers completed.

The tender offer results are unlikely to significantly affect MBK’s goal to seize control of Korea Zinc as the private equity firm and the smelter’s top shareholder Young Poong Corp. have already secured a large enough stake through a separate tender offer, industry sources said.

Write to Ji-Eun Ha at hazzys@hankyung.com
 
Jongwoo Cheon edited this article.