Reuters logo
UPDATE 2-U.S. fund Elliott intensifies Samsung merger battle, buys into more firms
July 6, 2015 / 2:04 AM / 2 years ago

UPDATE 2-U.S. fund Elliott intensifies Samsung merger battle, buys into more firms

* Fire & Marine, SDI owns stakes in Samsung C&T

* Potential new battlefront over $8 bln planned merger

* Fund seen pressuring Samsung for concessions-analyst (Updates with source confirmation on Elliott’s Samsung SDI investment)

SEOUL, July 6 (Reuters) - Elliott Associates has bought shares in Samsung Fire & Marine Insurance Co Ltd, a spokeswoman for the South Korean firm said on Monday, potentially strengthening U.S. hedge fund’s hand in its bid to block an $8 billion proposed merger of another two Samsung Group companies.

Samsung Fire & Marine is a shareholder in Samsung C&T Corp , the company Elliott wants to prevent being taken over by Samsung Group de facto holding company Cheil Industries . The $8 billion deal is seen as a key step in securing the leadership transfer for the sprawling family-run conglomerate.

Elliott, Samsung C&T’s third-largest shareholder with a 7.1 percent stake, recently bought a one percent stake in each of Samsung Fire & Marine and Samsung SDI Co Ltd, another shareholder in C&T, for about 200 billion won ($178 million) in total, the Chosun Ilbo daily reported earlier, citing unnamed banking and industry sources.

The Fire & Marine spokeswoman confirmed the purchase, but did not give details. Another person with direct knowledge of the matter told Reuters Elliott had also bought shares in Samsung SDI. Both Samsung SDI and Elliott declined to comment on the matter.

Elliott, in a rare case of shareholder activism in South Korea, has taken legal action to try and block Cheil’s all-stock takeover, saying the deal undervalues Samsung C&T.

The fund has also called on other shareholders to vote against the deal at a meeting scheduled for July 17. Last week, two influential proxy advisors also urged shareholders to reject the offer.

Park Ju-gun, head of corporate analysis firm CEO Score, said the investments give Elliott more leverage over the fate of the Cheil-C&T deal, and ultimately, Samsung Group’s restructuring, which gathered pace after 73-year-old patriarch Lee Kun-hee suffered a heart attack last year and remains in hospital.

“Samsung Group has no certainty over Chairman Lee Kun-hee’s condition, so they are trying to wrap up the restructuring process within this year and I think Elliott knows that,” Park said.

Under South Korean law, an investor with an at least one percent stake can sue the company’s directors and is able to see who the other shareholders are.

$1 = 1,126.2000 won Reporting by Joyce Lee and Se Young Lee; Editing by Edmund Klamann and Miral Fahmy

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below