Korea Zinc Successfully Defends Control of Young Poong Precision Corp.

Barchart · 10/15 22:13

Korea Zinc (KRX:010130), a global leader in the production of non-ferrous metals and a key player in critical supply chains, today issued an official statement following the end of MBK-Young Poong’s tender offer for Korea Zinc’s shares. MBK-Young Poong revealed through a regulatory filing that they have secured a 5.34% stake, falling short of their minimum target of 7%.

With Korea Zinc successfully defending its control of Young Poong Precision Corporation, the company reaffirmed its commitment to enhance shareholder value and reward shareholders’ trust by unveiling its vision to evolve from the world’s No.1 non-ferrous metals company into the world’s No.1 eco-friendly energy materials company.

Please find below a full statement from Korea Zinc.

Official Statement by Korea Zinc

MBK-Young Poong disclosed in a regulatory filing that their tender offer participation rate was only 5.34%, despite months of preparation for a surprise hostile M&A attempt and the spread of countless false rumors and slander campaigns.

This figure falls short of their minimum purchase quantity of 7% that they initially set when the tender offer began, rendering the operation a failure.

MBK stated, “This successful outcome was made possible thanks to the support of the capital market,” the results show otherwise, with shareholders collectively managing to dampen their ambitions.

MBK’s stated goal of “becoming the largest shareholder of Korea Zinc to ensure the best for the company’s sustainable growth and development” appears to have been met with unease. The proceedings of the tender offer reflect concerns from shareholders that the nation’s key industries could be sold off overseas, especially to China, along with worries that the company could be damaged by the short-term profit-seeking motives of a private equity firm.

MBK, which previously failed in another hostile M&A attempt earlier this year, is now trying to market this meager result of 5.34% of outstanding shares as a “success,” despite falling short of their initial 7% goal. This is clearly a ploy to shift public opinion away from their recent string of failures while avoiding the criticism they have garnered by abandoning their originally intended role as private equity fund – which is to inject capital into struggling companies to raise corporate value – in favor of becoming a corporate raider.

Especially considering their failed tender offer for Young Poong Precision Corporation, which MBK hasn’t even officially announced due to poor results, it is evident that the number of shares they have acquired is woefully inadequate.

There is one crucial issue that must be addressed.

How is it possible that approximately 5% of shares were tendered at a significantly lower price of KRW 830,000, ahead of Korea Zinc’s own tender offer at KRW 890,000? This is an outcome that does not follow common sense. Following the second preliminary injunction ruling, it will be made clear that shareholders were misguided to forego a guaranteed profit opportunity of KRW 60,000. This outcome stems from MBK’s market manipulation and fraudulent misconduct, which intentionally disrupted shareholders’ choices by stirring up public opinion on unsubstantiated legal risks through repeated obsolete injunctions.

Our shareholders, along with the general public, the government and the citizens of Ulsan who have witnessed these developments, will no doubt recognize this statement as the truth.

Moreover, no matter how much these crafty grifters attempt to hide or distort the truth, the following facts remain unchanged.

First, Korea Zinc has overwhelmingly safeguarded the management control of Young Poong Precision Corporation.

Coupled with MBK’s failed tender offer for Korea Zinc, it shows that the time has now come for Korea Zinc.

A month ago, MBK-Young Poong launched a surprise hostile takeover attempt, but we have found ways to protect the company, and these efforts will continue into the future.

Second, MBK-Young Poong are once again distorting the facts. Since more than 5% of the floating shares have disappeared, any increase in the ownership stakes of both sides through actions like a share buyback will be very limited. Considering the additional shares Korea Zinc has secured, along with the increase in voting rights, the balance of ownership between both sides remains at similar levels. Despite the noise they are making, nothing has changed since the tender offer or the shareholders’ meeting from earlier this year.

Notably, from the last shareholders’ meeting to the present day, Korea Zinc has been receiving consistent support from many third-party shareholders. This support has enabled us to grow our company and cultivate future growth engines such as Troika Drive.

This kind of commitment will remain unchanged.

We would also like to issue a clear warning: The world knows that they spread false rumors and slander during the tender offer period to tilt the outcome in their favor. Furthermore, MBK’s actions, which blatantly disregard both market and legal order, will not go unchallenged. We will hold them accountable through both civil and criminal lawsuits. They will have to bear the full consequences of their actions.

Even after merely securing a 5.34% stake, they may attempt to frame it as a “successful” operation and launch further attacks. However, we—Korea Zinc’s management and employees—are resolutely committed to defending our nation’s core industries and will never allow our company to be sold overseas, especially to China.

Our goal is to grow Korea Zinc, the world’s No.1 non-ferrous metal company, into the world’s No.1 eco-friendly energy materials company, enhancing shareholder value and rewarding our shareholders’ trust. To achieve this, we ask for the support, encouragement and wise decisions of the public, our shareholders and institutional investors.

Thank you.