(Bloomberg) -- Korea Zinc Co. shares rose to a record after buyout firm MBK Partners said it has acquired a large enough stake to help it win control of the world’s top zinc refiner.
The stock advanced as much as 4.8% to 831,000 won ($612). The private equity firm teamed up with Young Poong Corp. last month as part of a multi-billion dollar succession feud with Korea Zinc Chairman Choi Yun-beom.
Korea Zinc, however, said it believes subscription to MBK’s tender offer fell short of the buyout firm’s target. Analysts are divided over which party will win the takeover fight.
A buyback offer launched by Chairman Choi to fend off the unsolicited bid from the two companies will run until Oct. 23. That offer, supported by buyout firm Bain Capital, is for 890,000 won.
The endgame over the company’s ownership is expected to have ripple effects far beyond South Korea. The firm controls about 12% of the refined zinc output outside of China. Zinc is key metal for the energy transition, and is used to galvanize steel and as a coating to prevent rust on solar panels and wind turbines.
MBK said that they secured a 5.34% stake in the zinc smelter through their tender offer at 830,000 won apiece. The announcement was made after the offer closed at the end of Monday’s trading session.
MBK, which sought to purchase as much as 14.6% of the refiner’s shares, said it believes it has “secured enough voting shares to get our views across during shareholders meetings.” The shares Korea Zinc is buying back will have no voting rights, allowing MBK to gain the upper hand with its acquired stake, an MBK spokesman said by phone.
MBK scored “a partial win” by gaining more voting rights than Choi, but it will still have to navigate minority shareholder votes while pushing harder on the legal front to block Korea Zinc’s buyback, according to Sanghyun Park, an analyst who publishes on Smartkarma.
In contrast, analyst Douglas Kim said the tender offer results gives MBK the advantage. The probability of Choi’s victory is around 20% or less, he wrote in a note on Smartkarma.
Shares of Young Poong Precision Corp. — which owns Korea Zinc shares and is seen as pivotal in the takeover battle — fell as much as 9.9%.
(Updates with details throughout.)
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