shareholders debate bitterly contested samsung merger
Last Updated : GMT 06:49:16
Arab Today, arab today
Arab Today, arab today
Last Updated : GMT 06:49:16
Arab Today, arab today

Shareholders debate bitterly contested Samsung merger

Arab Today, arab today

Arab Today, arab today Shareholders debate bitterly contested Samsung merger

Samsung C&T
Seoul - AFP

Shareholders met Friday to vote on one of South Korea's most bitterly contested corporate mergers, with the country's dominant conglomerate, Samsung, facing an unprecedented challenge from stakeholder activists led by a US hedge fund.

The proposed merger of two Samsung Group units would see the group's de facto holding company, Cheil Industries, take over construction firm Samsung C&T in an all-stock deal.

For Samsung's founding Lee family, the merger is a crucial step in its strategy to consolidate its control of the giant, multi-headed conglomerate, ahead of a generational transfer of power from ailing patriarch Lee Kun-Hee.

But a significant number of C&T investors, rallied by US hedge fund Elliott Associates -- the company's second-largest single shareholder -- have loudly contested the takeover, arguing that it wilfully undervalues the C&T share price.

"The company is trying to forcibly push through with the merger which is absolutely unfair and unreasonable," Elliott lawyer Choi Young-Ik told Friday's shareholder meeting.

"I sincerely urge you to vote against it," Choi said.

Samsung C&T executives have argued that the takeover makes good business sense and will enhance shareholder value in the long-run, with a more competitive merged company that could target sales of 60 trillion won ($52 billion) by 2020.

- The 'only path' forward -

"Given the difficult global economic situation, the only path to secure the future of the company will be found in the merger, which will maximise synergy and help secure new growth engines," CEO Choi Chi-Hun told the meeting.

Samsung needs a two-thirds majority shareholder majority to push the merger through.

Experts say the outcome is too close to call following weeks of intense campaigning and lobbying by both sides -- in the courts, the media and on the doorsteps of individual retail shareholders.

A defeat for Samsung would be a landmark moment for shareholder activism in South Korea, where family-run conglomerates, or "chaebol," dominate the economy and are used to running their businesses with minimum investor interference.

For Samsung it would be a major blow that could have a significant knock-on effect for its strategy of streamlining the group into fewer, larger companies.

The family already controls Cheil and taking over C&T would solidify its grip on the entire conglomerate because the affiliate holds more than $10 billion in shares of Samsung Group units.

- Sweetheart deal? -

Elliot's argument is that C&T is being offered for takeover in what amounts to a sweetheart deal that penalises its shareholders.

"We think that this merger ought not to happen as it's structured," the hedge fund's owner, Paul Elliott Singer, told an investor conference in New York on Wednesday.

"We think it's also important for the way Korea and Korean corporate governance is perceived in the world," Singer said.

Nationalist voices in the South Korean media have sought to portray the proxy battle as corporate Korea's fight against pernicious outside influence, with some commentaries straying into far-right territory with remarks about ruthless Jewish financiers.

The remarks forced Samsung to issue a statement, condemning anti-Semitism "in all its forms."

Many eyes Friday were on the state-backed National Pension Service (NPS) -- the biggest single shareholder in Samsung C&T, with a near-12 percent stake that could swing the final vote either way.

Last Friday, the NPS said it had reached a decision on how it would vote, but declined to reveal its intentions before the shareholders' meet.

In an unprecedented show of domestic shareholder activism, more than 3,000 individual investors have created an online forum aimed at blocking the C&T takeover.

Kang Dong-Ok, an activist representing small shareholders, said Samsung had been playing a "dirty game" -- knocking on the doors of people's homes and visiting them at their workplace.

"Some small shareholders who initially opposed the merger, have ended up giving them proxies to avoid further harassment," he told Friday's meeting.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

shareholders debate bitterly contested samsung merger shareholders debate bitterly contested samsung merger

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

shareholders debate bitterly contested samsung merger shareholders debate bitterly contested samsung merger

 



GMT 10:06 2012 Saturday ,28 July

Querrey advances at ATP LA Open

GMT 21:15 2017 Thursday ,01 June

Trump condemns deadly Kabul explosion

GMT 02:15 2017 Thursday ,24 August

Is your country on the Qatar free entry list of 80?

GMT 19:48 2016 Monday ,03 October

Controversial boxing champ Tyson Fury retires

GMT 08:20 2015 Tuesday ,08 December

PC market woes show no sign of easing

GMT 17:27 2017 Tuesday ,25 April

20 Yemeni soldiers killed, injured in explosion

GMT 11:52 2017 Saturday ,30 December

OIC condemns Mar Mina Church attack

GMT 00:03 2017 Saturday ,25 March

Arab Meeting to Examine Anti-Corruption Methods

GMT 13:12 2017 Thursday ,20 April

Deputy premier meets Arab League chief

GMT 14:13 2014 Friday ,10 January

Opel Astra GTC

GMT 18:27 2016 Tuesday ,02 August

Turkish Foreign Minister arrives in Islamabad

GMT 11:27 2016 Tuesday ,13 December

Saudi woman arrested for challenging social norms
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday