“Tomorrow (21st), the conflict between the alliance of Youngpoong and MBK Partners, which is attempting to acquire the management rights of Korea Zinc, and the current management of Korea Zinc trying to block it, will reach another critical point.”
“According to business circles and other sources today (20th), the results of the second injunction filed by the Youngpoong-MBK alliance to prevent Korea Zinc’s share buyback are expected to come out as early as tomorrow.”
“During the injunction application hearing held at the Seoul Central District Court on the 18th, both parties engaged in a debate, with the Youngpoong-MBK alliance labeling Korea Zinc’s attempt to buy back shares as a ‘breach of trust’ and ‘defensive hostile takeover (M&A)’, respectively.”
“The Youngpoong-MBK alliance maintains its original position that ‘acquiring treasury shares at a price much higher than the normal stock price constitutes a breach of trust,’ arguing that the share buyback harms the interests of the company and its shareholders.”
“In response, Korea Zinc stated, ‘These logics were already rejected by the first injunction court, and it’s merely an attempt to tarnish us again,’ and that ‘it’s an attempt to unnecessarily influence the share buyback by highlighting legal risks.'”
“There are also voices saying that the stock price of Korea Zinc could fluctuate significantly immediately following the court ruling, which means stock investors should be cautious.”
“Since the management dispute, Korea Zinc’s stock price, which was hovering in the 500,000 KRW range, rose to over 660,000 KRW on the first day of the tender offer by the Youngpoong-MBK alliance on the 13th of last month, and exceeded 700,000 KRW the following month.”
“Furthermore, after Korea Zinc started the share buyback, the stock price rose to 830,000 KRW. On the last trading day, the 18th, the closing price was 824,000 KRW.”
“The market sees a possibility that if the court dismisses the second injunction, the stock price could soar to around 890,000 KRW, the final price proposed by Korea Zinc for the tender offer.”
“On the other hand, if the injunction is granted, making the share buyback by Korea Zinc impossible, the stock price is also expected to fall sharply, likely reverting to the levels before the management dispute.”
[Photo Source: Yonhap News / Captures from Korea Zinc and Youngpoong websites]
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