MBK Declares It Will Not Raise Tender Offer Price for Korea Zinc, Attempts to Shift Responsibility for 'Winner's Curse'

 

 

 

 

MBK Partners (hereinafter referred to as MBK) has made a strategic move in its fierce acquisition battle with Korea Zinc, declaring that it will no longer engage in a "price war."

On the 9th, MBK announced in a statement, "Regardless of whether Korea Zinc raises the tender offer price for its treasury stock, there will be no further price increase in our tender offer."

This declaration from MBK is seen as a strategy to pressure Chairman Yoon-Beom Choi of Korea Zinc by emphasizing that any further price increase could lead to excessive financial burden and the so-called "winner's curse" after the acquisition. At the same time, MBK is positioning its tender offer as an attractive option.

In particular, MBK seems to be taking preemptive action by highlighting the risk that an overheated tender offer competition could damage the long-term corporate value of the company, being mindful of public opinion and warnings from financial authorities.

This decision came after a strong warning from Lee Bok-hyun, head of the Financial Supervisory Service.

Director Lee had expressed concerns that an overheated tender offer competition could harm shareholder value and had forewarned that the financial authorities would be closely monitoring the situation.

In this environment, MBK's decision to forgo a price increase appears to be aimed at easing concerns from both financial authorities and the market, while also shifting the burden of the price competition onto Chairman Choi's side.

If Chairman Choi raises the tender offer price further, analysts suggest that the responsibility for the "winner's curse" may fall on him.

This move is being interpreted as MBK taking a relatively advantageous position in the market, increasing the likelihood that MBK may gain the upper hand.

However, there is still a possibility that Chairman Choi, who is pursuing the tender offer by taking on debt as part of a defensive strategy, may increase the tender offer price.

As the final day approaches for Chairman Choi to change the conditions without extending the tender offer period, the outcome of the acquisition battle is expected to be revealed soon.

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MBK Declares It Will Not Raise Tender Offer Price for Korea Zinc, Attempts to Shift Responsibility for 'Winner's Curse'