MBK Partners issued a statement on the 19th, explaining, “A call option is a right that can only be exercised once the contractual requirements are met,” and added, “It is not exercised simply because two years have passed; additional conditions must be satisfied.” The company further emphasized, “The mere passage of time does not mean that Youngpoong’s shares in KoreaZinc will be transferred to MBK.”
They also highlighted that Youngpoong holds a put option (right to demand the sale of shares) corresponding to the call option. Just as MBK Partners has a call option to demand that Youngpoong sell shares, Youngpoong can also demand that MBK Partners purchase shares. Both rights are calculated using the same formula: a base price of 700,000 won plus an annual increase of 5%.
According to MBK, the exercise price for both the call and put options is calculated by adding 35,000 won per share annually to the base price of 700,000 won. After two years, the exercise price is 770,000 won per share, and the amount increases the later the exercise occurs. Assuming a 10-year investment period, the price per share would exceed 1 million won. MBK explains that this provides a downside protection mechanism ensuring that Youngpoong can demand a sale at the agreed-upon price in accordance with the contractual terms, even if KoreaZinc’s stock price declines.
Dividends received prior to the option exercise also accrue to Youngpoong. MBK Partners explained that, assuming an annual dividend of 20,000 won per share for two years, the total amount Youngpoong would receive—comprising the exercise price of 770,000 won plus 40,000 won in dividends—would amount to 810,000 won per share. This structure ensures that both the exercise price and cumulative dividends increase as the holding period lengthens.
MBK emphasized, “It is entirely unreasonable to assess Youngpoong’s economic benefit by comparing only the final tender offer price and the reference price without taking these conditions into account.”
Meanwhile, MBK Partners and Youngpoong signed a management cooperation agreement in September 2024 while pursuing the tender offer for KoreaZinc. Under the agreement, the call option exercise period begins on the earlier of either two years after the completion of the tender offer or the date the consortium secures a majority on the board of directors. Since the consortium has not yet secured a majority on the board, the exercise period has now begun following the passage of two years.
