SEOUL (Reuters) – Korea Zinc holds a special shareholders’ meeting on Thursday to elect new board members that will cap a four-month takeover battle for the world’s top refined zinc producer.
A Seoul court on Tuesday rejected Korea Zinc’s bid to introduce a new voting scheme that would have improved the odds of its own board nominees getting elected, leaving rival candidates proposed by zinc producer Young Poong and private equity firm MBK Partners with a chance of gaining seats on the board, analysts said.
Young Poong and MBK have been attempting to wrest control away from Korea Zinc’s current management, led by Chairman Yun B. Choi, since September and have amassed a 40.97% stake in the firm, according to a December regulatory filing.
Korea Zinc’s Choi has an estimated 34.42% backing him, according to local media.
Young Poong and MBK have proposed 14 new candidates and Korea Zinc’s management has nominated seven. The firm currently has 13 board members.
National Pension Service, South Korea’s pension fund which has a 4.5% stake in Korea Zinc as of October 2024, has said it will pick three candidates each from either side.
The takeover battle has pitted members of Korea Zinc’s two founding families against each other.
Choi, a grandson of the company’s co-founder, had taken a series of steps to try to thwart the takeover bid including promising to give its board more independence by making way for an outsider to become its chair, as well as underscoring Korea Zinc’s role in the global supply chain for materials outside China.
MBK and Young Poong have said Korea Zinc’s current board of directors do not take into account shareholders’ interests, and vowed to improve governance at the zinc refiner.
Reactions have been divided. MBK and Young Poong have gained the backing of proxy adviser ISS, while Choi has gained the backing of proxy adviser Glass Lewis.
(Reporting by Joyce Lee; Editing by Miyoung Kim and Saad Sayeed)
