Did Korea Zinc Miss Its Tender Offer Target...? "Individual-Centered Trading, Increased Speculative Demand Intensity"

Korea Zinc Soars Past 1 Million Won on Buyout Expectations, Crowned 'Emperor Stock'
Interest Grows in Chairman Choi Yoon-beom's Public Buyout Subscription Rate Amid 'Unexpected Limit-Up'

Korea Zinc, currently embroiled in a management dispute, closed the trading day on the 24th at the upper limit of the trading restriction (limit up). Korea Zinc recorded a closing price of 1,138,000 KRW, up 262,000 KRW (29.91%) from the previous trading day. With this, Korea Zinc, along with Samsung Biologics, became one of only two "emperor stocks" on the KOSPI market with a stock price exceeding 1 million KRW. Its market capitalization stands at 23.5603 trillion KRW, ranking 14th on the KOSPI. The trading volume for the day was 140,973 shares, with a trading value of 151.886 billion KRW.

Korea Zinc’s Treasury Stock Tender Offer Subscription Rate Low... "Trading Mainly by Individuals, Strong Speculative Demand"

On the 24th, Yeongpung and MBK Partners, who had been closely monitoring the trading volume, described the volume and price increase as an "unexpected result." A senior official from the investment banking (IB) industry said, "Looking at the trading on this day, it was mainly individual investors, and with this level of speculative demand intensity, it seems the subscription rate for Korea Zinc’s treasury stock tender offer is not high." Although it was presumed that Chairman Choi Yoon-beom’s side had achieved their target in the tender offer related to the shareholding battle that concluded the previous day, there is analysis suggesting the subscription rate was lower than market expectations.

Korea Zinc completed its treasury stock tender offer the day before to secure additional shares beyond its existing stake of 33.99% (including expected friendly shares), but has yet to announce the results. Unlike general tender offers where a higher subscription rate is favorable, the treasury stocks tendered by Korea Zinc (up to 17.5%) have no voting rights and are all scheduled to be canceled. Because the calculation is complicated depending on the subscription results, it appears the company is delaying the announcement as much as possible.

Korea Zinc, Crowned 'Emperor Stock,' with Stock Price Breaking the Ceiling... How High Will It Go?

The Korea Zinc stock price, which set a new 52-week high amid expectations of on-market purchases, is attracting intense interest regarding how far it will rise. Currently, the difference in voting shares between the two sides is not large, so even a small stake could significantly influence the shareholder meeting results.

In fact, on-market purchases are expected to continue until the shareholder meeting is held. Lee Jae-won, a researcher at Shinhan Investment Corp., said, "Despite the end of the tender offer, competition to secure a majority stake is expected to continue."

Including the results of the recent treasury stock tender offer conducted with its ally Bain Capital, Chairman Choi’s side can increase Korea Zinc’s stake up to 36.49%. Meanwhile, the Yeongpung-MBK alliance, which completed its tender offer on the 14th, has raised its stake to 38.47%. With only about a 2 percentage point difference between the two sides, it is anticipated that the competition for shares will continue through on-market purchases and friendly shares.

"The Temptation of Returns"... Will the White Knights Still Hold Their Shares?

Alongside subscription results and stock price fluctuations, another key point of interest is whether Korea Zinc’s white knights participated in the tender offer. One of the major market concerns immediately after the tender offer ended was whether Korea Investment & Securities subscribed. Korea Investment & Securities, holding a 0.8% stake purely for investment purposes, has maintained a "no comment" stance regarding the Korea Zinc tender offer.

Earlier, it was revealed that Korea Precision Works, a subsidiary of Hankook Tire & Technology, earned 800 million KRW in profits through short-term trading amid the surge in Korea Zinc’s stock price during the management dispute, raising concerns about the potential defection of Korea Zinc’s white knights.

As Korea Zinc ascended to become an "emperor stock" with a price exceeding 1 million KRW, these concerns have intensified. Market attention is focused on whether there will be any changes in the stakes held by white knights such as Hyundai Motor Group (5.05%), Hanwha Group (7.8%), LG Chem (1.9%), Trafigura Group (1.5%), Korea Investment & Securities (0.8%), Hankook Tire & Technology (0.8%), Morgan Stanley (0.5%), and Chosun Refractories (0.2%).

This content was produced with the assistance of AI translation services.