Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

Event-Driven

<ul>
<li>Korea Zinc is launching a 3.21M share buyback (15.5% of total shares) via a KRW 2.66T tender offer at ₩830,000 per share, with Bain Capital involved.</li>
<li>If tendered shares fall short, Korea Zinc and Bain Capital will buy all. If over the target, they’ll buy pro rata. Below 1,215,283 shares, they will opt out.</li>
<li>Should we dive into Korea Zinc's risky buyback or choose safer, lower-priced MBK? The market vibe favors MBK, reflected in Korea Zinc's closing price today.</li>
</ul>


Korea Zinc is launching a 3.21M share buyback (15.5% of total shares) via a KRW 2.66T tender offer at ₩830,000 per share, with Bain Capital involved.
If tendered shares fall short, Korea Zinc and Bain Capital will buy all. If over the target, they’ll buy pro rata. Below 1,215,283 shares, they will opt out.
Should we dive into Korea Zinc's risky buyback or choose safer, lower-priced MBK? The market vibe favors MBK, reflected in Korea Zinc's closing price today.


Korea Zinc’s Buyback Tender Offer at ₩830,000: Market Vibe Still Leans Towards MBK

<ul>
<li>The court rejected MBK and Young Poong’s injunction to block Korea Zinc’s buyback, allowing Choi’s side to continue using buybacks to defend control.</li>
<li>Korea Zinc plans an emergency board meeting to launch a tender offer, using internal funds, to buy back shares at 800K-850K KRW starting around October 7.</li>
<li>If Choi converts discretionary reserves into distributable profits, Korea Zinc could unlock 2-3 trillion KRW for the buyback, but uncertainty keeps the stock around 700K KRW.</li>
</ul>


The court rejected MBK and Young Poong’s injunction to block Korea Zinc’s buyback, allowing Choi’s side to continue using buybacks to defend control.
Korea Zinc plans an emergency board meeting to launch a tender offer, using internal funds, to buy back shares at 800K-850K KRW starting around October 7.
If Choi converts discretionary reserves into distributable profits, Korea Zinc could unlock 2-3 trillion KRW for the buyback, but uncertainty keeps the stock around 700K KRW.


Court Dismisses Injunction; Korea Zinc to Announce Buyback Tender Offer Soon

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>For the month of September 2024, 15 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$23bn. </li>
<li>The average premium for the new transactions announced (or first discussed) in September was ~43%. The average premium YTD is ~44%</li>
<li>This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.</li>
</ul>


For the month of September 2024, 15 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$23bn. 
The average premium for the new transactions announced (or first discussed) in September was ~43%. The average premium YTD is ~44%
This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.


(Mostly) Asia M&A, Sep 2024: GTJA/Haitong Sec, Korea Zinc/YPP, Hotel Property, Virgin Money, Raysum

<ul>
<li>Overseas institutions might tender around 4%, locals about 6%, giving a realistic max of 10%. MBK may struggle to even reach that minimum of 7%.</li>
<li>Mirae Asset and Samsung Life, holding the largest portion of the targetable stakes, hinted they'll participate in the tender but won't tender all their shares.</li>
<li>Allocation risk for the tender is minimal, but cancellation risk remains. MBK may barely exceed the 7% minimum, making predictions tough and reducing chances of a post-tender stock price drop.</li>
</ul>


Overseas institutions might tender around 4%, locals about 6%, giving a realistic max of 10%. MBK may struggle to even reach that minimum of 7%.
Mirae Asset and Samsung Life, holding the largest portion of the targetable stakes, hinted they'll participate in the tender but won't tender all their shares.
Allocation risk for the tender is minimal, but cancellation risk remains. MBK may barely exceed the 7% minimum, making predictions tough and reducing chances of a post-tender stock price drop.


Latest Forecast for Korea Zinc's Tendering Rate

<ul>
<li>MBK Partners has increased the Tender Offer prices for <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> by 13.6% to ₩750,000 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> by 25% to ₩25,000.</li>
<li>All other terms remain the same.  IF MBK secures the maximum 14.61% in KZ, this will be Korea's largest-ever Tender Offer.</li>
<li>MBK made a public offering correction announcement today. The Choi family now has 5 business days in which to respond with a counteroffer.</li>
</ul>


MBK Partners has increased the Tender Offer prices for Korea Zinc (010130 KS) by 13.6% to ₩750,000 and Young Poong Precision (036560 KS) by 25% to ₩25,000.
All other terms remain the same.  IF MBK secures the maximum 14.61% in KZ, this will be Korea's largest-ever Tender Offer.
MBK made a public offering correction announcement today. The Choi family now has 5 business days in which to respond with a counteroffer.


MBK Bumps Offers For Both Korea Zinc and Young Poong Precision

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)

Korea Zinc’s Buyback Tender Offer at ₩830,000: Market Vibe Still Leans Towards MBK

Korea Zin is launching a 3.21M share buyback (15.5% of total shares) via a KRW 2.66T tender offer at ₩830,000 per share, with Bain Capital...

Sanghyun Park

Court Dismisses Injunction; Korea Zinc to Announce Buyback Tender Offer Soon

Korea Zinc (010130 KS) is launching a 3.21M share buyback (15.5% of SO) via a KRW 2.66T tender offer from Oct 4-23, 2024. Mirae Asset is handling...

Sanghyun Park

(Mostly) Asia M&A, Sep 2024: GTJA/Haitong Sec, Korea Zinc/YPP, Hotel Property, Virgin Money, Raysum

For the month of Sep, 15 new deals were discussed on Smartkarma with an overall deal size of just ~US$23bn. The average premium for the new deals...

David Blennerhassett

Latest Forecast for Korea Zinc's Tendering Rate

This post dives into the latest insights and analysis regarding the forecast for Korea Zinc's tendering rate by exploring the factors influencing...

Sanghyun Park

MBK Bumps Offers For Both Korea Zinc and Young Poong Precision

YP, Korea Zinc and YPP are in play. YP is my preferred pick - but it's not terribly liquid. Neither is YPP. Enter KZ around here or below the...

David Blennerhassett

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