The measures came as the 8.9 trillion-won (US$7.92 billion) proposal to take over Samsung C&T has been opposed by USA hedge fund Elliott Associates, which claimed that the merger is against shareholders’ interests and designed to help the leadership transfer at the family-run conglomerate.
According to Reuters, Samsung Elect Ltd.’s (OTCMKTS:SSNLF) de facto holding company Cheil Industries Inc. sought to gain support for the $8-billion merger proposition with the tech giant’s trading and construction business, Samsung C&T Corporation.
The fund, which has a reputation for getting what it wants, said in a statement: “While we are disappointed with the court’s decision, we continue to believe that the proposed merger is neither fair nor in the best interests of Samsung C&T’s shareholders”. A South Korean court is set to rule on Elliott’s injunction on Wednesday, ahead of a shareholder vote on July 17. Samsung C&T recently sold its treasury shares to KCC to win more votes in support of the merger.
C&T, separately, sent a letter to shareholders on Tuesday urging them to accept the deal: “We caution our shareholders to be wary of Elliott’s questionable motives”, it said.
Bioepis announced Monday it is considering going public on the Nasdaq, planning to raise about 1.5 trillion won ($1.3 billion). Rumors were ripe about what was behind the low level of C&T stock prices.
The new Samsung C&T will become the largest shareholder of biopharmaceutical company Samsung Biologics, with a 51.2 percent stake.
The judges said there were no grounds to believe that the stock prices of C&T were unlawfully manipulated.
As Cheil Industries offered a rather pleasant deal, Samsung looks forward to the merger. It said combining the two companies would let them boost existing businesses. Many in the markets saw those moves as steps toward succession that would pave the way for the chairman’s son to strengthen his control at key Samsung firms, such as Samsung Electronics Co., the group’s crown jewel.
Cheil co-Chief Executive Yoon Joo-hwa told analysts during a briefing on Tuesday that if the current offer fails, the firm won’t try again to merge with Samsung C&T. The younger Lee has tiny holding at Samsung Electronics and inheriting his father’s stake at the smartphone maker or other Samsung firms would incur heavy inheritance taxes.
Elliott had filed two lawsuits, one of which called for a court order to prevent a Samsung shareholders’ meeting on July 17 to approve the proposed merger.