SEOUL - Korea Zinc said on Monday it has secured 9.85% of the company's shares in a buyback that it launched to block shareholders from selling their stakes to its top investor Young Poong and private equity firm MBK.

Run by the Choi family, Korea Zinc has been in a bitter fight for control of the $18 billion zinc empire with the co-founding Chang family, whose conglomerate Young Poong made an initial joint offer with MBK in September.

MBK and Young Poong together own nearly 39% of Korea Zinc.

Before the buyback, Korea Zinc's Choi family had the backing of shareholders that owned up to 36% of the company, including strategic partners such as Hyundai Motor Group, according to analysts.

Korea Zinc said on Monday it would cancel all of its newly acquired shares to raise shareholder value. However, cancellation of the shares means the Chois' stake will not increase relative to its rival. Bain Capital, which backs Korea Zinc, separately secured a 1.41% stake in the company, the zinc refiner said in a regulatory filing.

Neither side has a majority stake in the case of a proxy fight.

The latest transactions suggest the overall backing Korea Zinc's management has secured so far is smaller than the stake held by MBK and Young Poong and raised investor expectations for a prolonged takeover battle, driving Korea Zinc shares to record highs on Monday.

Shares in Korea Zinc jumped as much as 7.5% on Monday, after hitting an all-time high last week, as the number of shares available to trade have shrunk due to tender offers from both sides.

Young Poong and MBK Partners plan to call for an extraordinary shareholder meeting this year to seek approval to appoint board nominees, Kim Kwang-il, a partner at the fund, told Reuters last week, escalating the takeover battle.

Various shareholders widely viewed as sympathetic to the Chois, such as Hyundai Motor, Hanwha Group and LG Chem, have yet to publicly declare their stance.

South Korea's National Pension Service (NPS), the world's third-largest pension fund which held a 7.83% stake in Korea Zinc at end-June, is expected to be a key casting vote. It has yet to disclose its stance.

(Reporting by Joyce Lee and Heekyong Yang; Editing by Tom Hogue, Stephen Coates and Sonali Paul)