Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>In this insight, we discuss in detail MBK's four major concerns on the management of Korea Zinc. </li>
<li>We believe that MBK has legitimate concerns on especially the three factors including poor investments, deteriorating profitability, and increase in equity capital/disposal of treasury shares. </li>
<li>If and when the 2 trillion won+ is raised, then it could lead to another tender offer and the four concerns highlighted in this insight become much more important.</li>
</ul>


In this insight, we discuss in detail MBK's four major concerns on the management of Korea Zinc. 
We believe that MBK has legitimate concerns on especially the three factors including poor investments, deteriorating profitability, and increase in equity capital/disposal of treasury shares. 
If and when the 2 trillion won+ is raised, then it could lead to another tender offer and the four concerns highlighted in this insight become much more important.


Details of MBK's Four Major Concerns on Management of Korea Zinc

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>On the 13th September, MBK joined <a href="https://www.smartkarma.com/entities/young-poong-corporation" target="_blank" data-smartkarma-citation="entities:11740:1" rel="noopener">Young Poong (000670 KS)</a> in seeking control of <a href="https://www.smartkarma.com/entities/korea-zinc-co-ltd" target="_blank" data-smartkarma-citation="entities:17944:1" rel="noopener">Korea Zinc (010130 KS)</a> via Partial Tender Offers for KZ and <a href="https://www.smartkarma.com/entities/young-poong-precision-corp" target="_blank" data-smartkarma-citation="entities:16188:1" rel="noopener">Young Poong Precision (036560 KS)</a>.</li>
<li>This situation has been canvassed by analysts here at Smartkarma; with increasing expectation the Choi family makes a counterbid.</li>
<li>This insight analyses the fair value of YPP. No matter how you slice it, the Offer Price is punchy. Perhaps not punchier enough.</li>
</ul>


On the 13th September, MBK joined Young Poong (000670 KS) in seeking control of Korea Zinc (010130 KS) via Partial Tender Offers for KZ and Young Poong Precision (036560 KS).
This situation has been canvassed by analysts here at Smartkarma; with increasing expectation the Choi family makes a counterbid.
This insight analyses the fair value of YPP. No matter how you slice it, the Offer Price is punchy. Perhaps not punchier enough.


Young Poong Precision (036560 KS) Also Now Trading Through Terms

<ul>
<li>Hankyung Business Daily reported that Korea Investment Securities (KIS) is in a serious discussion with the Choi family of Korea Zinc to step up as a white knight.</li>
<li>KIS/Choi family are considering a plan to launch a counterbid against Jang family and MBK by investing around 2 trillion won+ along with other private equity funds.</li>
<li>It is probable that tender offer price of Korea Zinc could be raised by 15-25% due to a likely counterbid and current price trading 7% higher than tender offer price.</li>
</ul>


Hankyung Business Daily reported that Korea Investment Securities (KIS) is in a serious discussion with the Choi family of Korea Zinc to step up as a white knight.
KIS/Choi family are considering a plan to launch a counterbid against Jang family and MBK by investing around 2 trillion won+ along with other private equity funds.
It is probable that tender offer price of Korea Zinc could be raised by 15-25% due to a likely counterbid and current price trading 7% higher than tender offer price.


Korea Investment Securities to Step up as the White Knight for Choi Family at Korea Zinc

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>The key issue is if KIS can form a consortium. PEFs are saying the timeline is too tight and are concerned about the unclear exit strategy.</li>
<li>To make this work, PEFs need Choi's 15.65% Korea Zinc stake as collateral, but much of it is already tied up, limiting cash-raising potential.</li>
<li>They’ll likely continue to leak news to boost the price and buy time. But this will also push MBK to sweeten their offer sooner.</li>
</ul>


The key issue is if KIS can form a consortium. PEFs are saying the timeline is too tight and are concerned about the unclear exit strategy.
To make this work, PEFs need Choi's 15.65% Korea Zinc stake as collateral, but much of it is already tied up, limiting cash-raising potential.
They’ll likely continue to leak news to boost the price and buy time. But this will also push MBK to sweeten their offer sooner.


Digging into the News Flow on KIS Jumping in as the White Knight for Choi in the Korea Zinc Deal

<ul>
<li>MBK’s funding plan for Korea Zinc involves using ₩1T from their 6th Buyout Fund and the rest via debt. This setup leaves room to potentially increase the tender price.</li>
<li>The key question is if there’s enough upside at this price. MBK’s silence on abandoning Youngpoong suggests they’re unlikely to fully bail on Korea Zinc even if the tender fails.</li>
<li>With MBK’s strategy leaked, institutions may hesitate, fearing less price drop risk, suggesting a proxy battle could heat up. We should consider spread trading and post-tender price moves.</li>
</ul>


MBK’s funding plan for Korea Zinc involves using ₩1T from their 6th Buyout Fund and the rest via debt. This setup leaves room to potentially increase the tender price.
The key question is if there’s enough upside at this price. MBK’s silence on abandoning Youngpoong suggests they’re unlikely to fully bail on Korea Zinc even if the tender fails.
With MBK’s strategy leaked, institutions may hesitate, fearing less price drop risk, suggesting a proxy battle could heat up. We should consider spread trading and post-tender price moves.


Main Takeaways from Today’s MBK Press Briefing About the Korea Zinc Tender

South Korea

Korea Zinc Co., Ltd. specializes in non-ferrous metal smelting industry.  The Company manufactures zinc ingots, electrolytic gold, silver, lead, sulfuric acid, and copper.  Korea Zinc provides its products to domestic and overseas markets.

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Korea Zinc (010130 KS)

Details of MBK's Four Major Concerns on Management of Korea Zinc

We believe that MBK has legitimate concerns on especially the three factors including poor investments, deteriorating profitability, and increase...

Douglas Kim

Young Poong Precision (036560 KS) Also Now Trading Through Terms

YPP is also firmly in the cross-hairs. At a ~36% discount to NAV, YPP remains inexpensive. IF you can get in around these levels next week, do so....

David Blennerhassett

Korea Investment Securities to Step up as the White Knight for Choi Family at Korea Zinc

KIS/Choi family are considering a plan to launch a counterbid against Jang family and MBK by investing around 2 trillion won+ along with other...

Douglas Kim

Digging into the News Flow on KIS Jumping in as the White Knight for Choi in the Korea Zinc Deal

This post digs into the news flow about Korea Investment & Securities stepping in as the white knight for Choi’s side in the Korea Zinc deal.

Sanghyun Park

Main Takeaways from Today’s MBK Press Briefing About the Korea Zinc Tender

This post offers the rundown on the key takeaways from today’s MBK press briefing about the Korea Zinc tender, particularly from a trading...

Sanghyun Park

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