(Bloomberg) -- South Korea’s financial watchdog will investigate potential unfair trading practices around the takeover battle for Korea Zinc Co., as the fight for the world’s top refiner of the metal intensifies.

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The warning comes after private equity firm MBK Partners and Young Poong Corp., the company’s biggest shareholder, raised their offer for a second time on Friday. They are now bidding 830,000 won per share, the same price at which Korea Zinc is attempting to buy back its own stock.

Financial Supervisory Service Governor Lee Bokhyun said the fight for control of Korea Zinc was “overheated,” in a statement Tuesday. He warned that if the watchdog finds anyone engaging in unfair trade practices, they will be punished in accordance with laws and principles.

Any act of spreading rumors, aimed at interfering with the other party’s offer, or influencing the stock price will also be punished, the regulator said. Excessive price competition that ignores long-term corporate value is likely to ultimately hurt shareholder value, it added.

Korea Zinc shares dropped as much as 3.6% in Seoul following the announcement. They were trading down 1.3% at 770,000 won, well below the offer prices, as of 12:43 p.m. local time.

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