SEOUL: A South Korean court today rejected a US hedge fund’s request to block the sale of treasury stocks by construction firm Samsung CT, clearing the path for the US$8bil merger of two Samsung affiliates.
The planned merger, which would see Cheil Industries acquire Samsung CT Corp through an all-stock deal, is the latest in a series of moves by Samsung’s founding Lee family to boost control over the conglomerate ahead of a generational power transfer.
The US hedge fund, Elliot Associates, which holds a 7.12% stake in Samsung CT, has opposed the merger, arguing that it “significantly undervalues” the construction firm’s stock.
The Seoul Central District court had already dismissed an Elliot demand to prevent a July 17 Samsung shareholders’ meeting called to approve the proposed merger.
Today’s ruling rejected a second demand to halt Samsung CT’s sale of treasury stocks to a “friendly” shareholder, chemicals maker KCC Corp.
Elliot, which had argued that the sale was aimed at boosting the pro-merger vote at the shareholders’ meeting, said it would appeal the ruling.
“We maintain our firm view that the deliberate sale of treasury shares, designed solely to support a fundamentally unfair deal for Samsung CT’s shareholders, was wholly improper,” the hedge fund said in a press statement.
Samsung CT welcomed the court’s confirmation that the share sale met all legal requirements.
“We strongly believe that the proposed merger is in the best interest of the company and our shareholders,” it said in a statement. - AFP
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