Korea Zinc shares up nearly 30% as investors bet on long battle for control

SEOUL : Shares in Korea Zinc skyrocketed 29.9 per cent on Thursday to a record high, after a tender offer for shares in the world’s biggest zinc smelter ended as it tries to fend off a takeover bid by private equity firm MBK and Young Poong.
Korea Zinc has not yet disclosed the outcome of its 3.2 trillion won ($2.4 billion) tender offer to buy its shares, which expired on Wednesday.
But investors are betting that both sides of the takeover battle will try to snap up more shares in a market where only a limited number of stocks are available. So far, neither side in the takeover battle appears to have a significant lead in stake size, analysts said.
“After tender offers, both sides are expected to rake in more shares through open purchase… Neither has a majority (stake) yet, and there will be people trying to take profit in the meantime,” said Cho Jun-kee, an analyst at SK Securities.
Korea Zinc, backed by Bain Capital, has been in a bitter fight for control of its $13 billion zinc empire with its co-founding Chang family, whose electronics conglomerate Young Poong made an initial tender offer with MBK in September.
MBK and Young Poong – which is already Korea Zinc’s largest shareholder – secured a 5.34 per cent additional stake in Korea Zinc earlier this month, increasing their side to about 38.5 per cent stake.
Meanwhile, the stake favourable to Korea Zinc’s current management was estimated at about 34 per cent before Wednesday, according to Yonhap.
It is unclear how much this stake has increased since Wednesday’s tender offer expiry.