The announcement during an irregular investor relations session is Samsung’s latest effort to convince investors of the benefits of the proposed merger between Cheil and Samsung C&T, after the plan was challenged by USA activist hedge fund Elliott Associates.
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“The steps show that the companies are mindful of shareholder value, but we need to take a closer look at the details and whether the growth strategy set forth is reasonable”, said Baik Jae-yer, fund manager at Korea Investment Trust Management, a Samsung C&T investor.
“We note that the Court has not yet decided whether the wholly inappropriate sale of treasury shares by Samsung C&T to KCC in blatant support of the Proposed Merger is, as Elliott believes, unlawful”. “We will continue to seek to prevent the proposed merger from being consummated, and we urge all Samsung C&T shareholders to do the same”.
As The Korea Economic Daily first reported, Samsung Bioepis is in the early stages of its plot to go public, now vetting potential underwriters and eyeing a second-half debut.
During the month before the merger was announced in May, C&T shares were trading near a five-year low, while Cheil shares were near a record high.
“The Court’s ruling validates the fairness of the merger ratio and affirms that legal requirements have been met”, it said in a statement. On a forecasted pre-tax profit of over $3.5 billion for 2020, the promised dividend would be $4.29 per share. The merged entity would consolidate stakes in key companies including Samsung Electronics Co Ltd into a vehicle firmly controlled by the Lee heirs, helping cement the succession process.
The judges said there were no grounds to believe that the stock prices of C&T were unlawfully manipulated.
Shares of Cheil Industries rose 1.4% in Seoul, while Samsung C&T fell 0.1%. They also said the value of the Samsung affiliated companies’ stocks that C&T own is just one of many factors that determine its stock prices. Cheil would be able to bring its fashion and other domestic businesses to global markets through C&T’s networks, for example, it said.
Many in markets saw it as part of the once-in-a-generation leadership transition.
The Lee family controls the vast Samsung Group via a complex web of cross shareholdings between the group’s subsidiaries, including Samsung Electronics – the group’s flagship unit and the world’s top maker of smartphones and mobile phones.
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Samsung C&T asked its shareholders to delegate their voting rights to the company on Thursday, a day after the hedge fund made the same request.
