Daily Brief Energy/Materials: Korea Zinc, Young Poong, Osino Resources and more

• MBK has teamed up with Young Poong (000670 KS) to secure control of Korea Zinc (010130 KS) via Partial Tender Offers for Korea Zinc and Young Poong Precision (036560 KS).
• Preceding my comments on Young Poong, Korea Zinc, and Young Poong Precision are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• We have significantly raised the NAV of Young Poong to 965,193 won (up 105% than previously). Our current NAV estimate of the company is 150% higher than current price.
• Some traders have been positioning for Young Poong to be deleted from the KOSPI200 in the next round of rebalancing. Young Poong is not likely to be deleted from KOSPI200.
• We also provide three potential scenarios of the Choi family’s strategy to fight back to gain control of Korea Zinc.

• Since Choi and his affiliates can’t buy shares directly, his only play is to recruit more white knights to boost his stake.
• He needs at least 6% from the 23% free float, costing over ₩800 billion. This hefty price tag is why the stock hasn’t moved much from the tender offer price.
• The market isn’t ruling out Hyundai getting aggressive to secure Korea Zinc’s nickel, making this a hot trading point during the tender offer.

• Osino Resources offering short-term merger arbitrage opportunity through acquisition agreement with Yintai Gold
• All-cash transaction valued at C$1.90 per share, presenting 7% return opportunity for investors
• Yintai Gold’s 32% premium offer compared to previous bid from Dundee Precious Metals provides downside support; seen as relatively low-risk opportunity suitable for smaller funds

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.