By Kwanwoo Jun


Bain Capital-backed Korea Zinc has raised its share-buyback offer to frustrate a takeover bid by Seoul-based private-equity firm MBK Partners, in a battle for control over the world's largest zinc smelter.

The South Korean nonferrous metal company said Friday that it increased its stock repurchase price by 7.2% to 890,000 won a share, or about $659 each. That is higher than MBK's raised and final offer of 830,000 won.

The company also said it will buy back 3.225 trillion shares for cancellation, up 21% in value from its original plan.

In a separate regulatory filing, Korea Zinc said it will also raise its tender offer for Young Poong Precision, an industrial-valve manufacturer with a stake in the company, by 17% to 35,000 won apiece.

The sweetened offer came days after MBK, which manages around $30 billion in assets, declined to raise its tender offer further for Korea Zinc. MBK had already increased its bid for a second time since the takeover tussle began in mid-September. Its tender offer runs until Oct. 14.

MBK, in its response, said Korea Zinc's newly raised buyback offer--heavily financed by loans--could weaken the smelter's financial health and business competitiveness. "Korea Zinc shareholders would be left with a worse-off company financially and profitably," MBK said in a statement.

Having teamed up with Young Poong and other Korea Zinc shareholders to secure a controlling stake, MBK said it will continue with a legal fight against the company board's decision on debt-financed share buybacks regardless of the tender offer outcome.

Korea Zinc, however, said a local court had already ruled against MBK's earlier challenge to the stock-repurchase plan.

"Korea Zinc remains fully committed to completing the ongoing buyback and cancellation process, as approved by the court, to enhance shareholder value and return profits to our shareholders," the company said.

The fight for control over Korea Zinc, which also processes copper and nickel and produces sulfuric acid used by semiconductor manufacturers to clean wafers, became global last week when Boston-based Bain Capital stepped in and agreed to buy a 2.5% stake in the company for 430 billion won.

South Korea's financial watchdog earlier this week warned against any unfair trading practices surrounding the takeover battle.


Write to Kwanwoo Jun at kwanwoo.jun@wsj.com


(END) Dow Jones Newswires

10-11-24 0446ET