The merger is opposed by some of Samsung C&T’s shareholders, led by U.S. hedge fund Elliott Associates, which filed several unsuccessful lawsuits to stop the merger from going ahead, arguing that it would undervalue the company’s stock.
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Lee family, which is controlling the Samsung conglomerate, has achieved a big victory over Elliot Associates LP when shareholders gave their approval for the $8 billion merger of two affiliates.
“We will do our utmost to ensure their support is repaid in the form of heightened shareholder value”, he said. The ship building industries in China and South Korea have been struggling with fewer orders and growing debt as low freight rates discourage ship owners from making agreements for new vessels. Samsung C&T – “construction and trade” – will stand at the head of all companies in a group whose interests range from life insurance to shipbuilding to biotechnology, among numerous other fields. Nor apparently had anyone convinced him that Samsung would surely round up the shareholder votes to get what it wanted.
“If anything, we think that by the time we launch [in September], that we will have significant announcements associated with which banks, which networks are participating with Samsung Pay and even which merchants and which programs attached to merchants will all be a part of Samsung Pay”, Graylin said. He said he would vote for the deal, but expressed displeasure with Samsung C&T board of directors.
“Just because it’s not legally flawed doesn’t make it right”, one middle-aged shareholder, who identified himself as Mr. Park, told executives. Some investors moved to lock in profits from recent double-digit gains, while others apparently decided to exit.
C&T’s biggest shareholder, South Korea’s National Pension Service, reportedly cast its 11.2pc voting stake in favor of the deal.
Kang Dong-Ok, an activist representing small shareholders, accused Samsung of playing a “dirty game” – harassing shareholders at their homes and workplaces.
Matters took an ugly turn when business publications used anti-Semitic smears to attack Elliott and its founder Paul Singer.
In response Samsung posted a number of inflammatory cartoons on its website showing Mr Singer as a long-beaked vulture, which have since been taken down.
Through the merger, Mr. Lee, who has a 23% share of Cheil Industries, will now have direct control of Samsung C&T’s 4.1% stake in Samsung Electronics, the world’s largest handset maker by sales.
Lee, son of Samsung Electronics chairman Lee Kun-hee and the company’s chief operating officer arrives at the company’s headquarters in Seoul December 1, 2010.
But two banking sources contacted by FinanceAsia noted that there is now no reason for Elliott to keep its 7.1% shareholding, tipping an exit via a block deal.
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The Lee family’s $270 billion empire, Samsung Group, encompasses much more than just Samsung Electronics.
