Private equity firm MBK Partners has teamed with Young Poong Corp, the largest shareholder of Korea Zinc Co, to launch a joint tender offer to acquire a controlling stake in the world’s leading refined zinc producer, valuing the company at KRW13.7tn won ($10.3bn), according to a report by Bloomberg.
Korea Zinc’s shares soared by as much as 24% — a record gain — after the announcement of the offer to acquire up to 14.6% of the company late on Thursday.
The bid for control comes amid ongoing tension over management of Korea Zinc, which was founded over 70 years ago by Choi Ki-ho and Chang Byung-hee. While the two families have retained significant stakes in the business through Young Poong Corp, over the years, the Chang family has consolidated more control, while the Choi family’s holdings have become fragmented among five sons, leading to dilution.
Since taking the helm of Korea Zinc in 2022, Chairman Choi Yun-beom, a grandson of the founder, has spearheaded a major shift toward battery metals and renewable energy. This strategic shift, designed to secure the company’s future in an industry heavily reliant on carbon-intensive smelting, has sparked disputes within the families.
The report quotes Hyung-chin, the son of Young Poong’s late founder, as saying that: “It is neither possible nor appropriate for third-generation family members to co-manage the company when shares have become fragmented.”
Korea Zinc though has voiced strong opposition to MBK’s involvement, calling it a “hostile and predatory” takeover attempt. In a statement rejecting the offer, the company criticised MBK as a “speculative capital” entity.
MBK’s offer stands at 660,000 won per share, a 19% premium over Thursday’s closing price. The offer, open from 13 September to 4 October, could cost MBK around KRW2tn based on Bloomberg’s calculations. Shares of Korea Zinc closed at KRW666,600 on Friday.
The private equity firm has signed an agreement with Young Poong Corp. and its founding family, who together hold more than 30% of Korea Zinc. MBK is expected to obtain a call option to buy some of the family’s shares, ultimately gaining control of more shares than Young Poong and its family members.
Founded in 2005, MBK Partners manages over $30 billion in assets. Under the agreement, the firm will also acquire voting rights for Young Poong and the remaining stake held by the Chang family.
