SEOUL : Korea Zinc said on Monday it has secured 9.85 per cent of the company’s shares in a $1.5 billion buyback that it launched to block shareholders from selling their stakes to its top investor Young Poong and private equity firm MBK.
Bain Capital, which backs Korea Zinc’s current leaders, separately secured a 1.41 per cent stake in the company, the world’s biggest zinc smelter said in a regulatory filing.
Run by the Choi family, Korea Zinc has been in a bitter fight for control of the $18 billion zinc empire with the co-founding Chang family, whose conglomerate Young Poong made an initial joint offer with MBK in September.
The latest transactions suggest the overall backing Korea Zinc’s management has won so far is smaller than the stake held by MBK and Young Poong. That raised investor expectations for a prolonged takeover battle, driving Korea Zinc shares to record highs on Monday.
MBK and Young Poong together own nearly 39 per cent of Korea Zinc.
Before the buyback, Korea Zinc’s Choi family had the backing of shareholders that owned up to 36 per cent of the company, including strategic partners such as Hyundai Motor Group, according to analysts.
Korea Zinc said on Monday it spent 2.07 trillion won ($1.5 billion) on the buyback and would cancel all of its newly acquired shares to raise shareholder value.
Cancellation of the shares means the Chois’ stake will not increase relative to its rival.
Neither side has a majority stake in the case of a proxy fight.
Shares in Korea Zinc jumped 10 per cent on Monday to a record high of 1.38 million won, or 55 per cent above its buyback price of 890,000 won, as the number of shares available to trade have shrunk due to tender offers from both sides. Shares in Young Poong also
