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South Korea court: Elliott can't stop Samsung's $8 billion merger

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Staff writer ▼ | July 1, 2015
A court in South Korea rejected a U.S. hedge fund Elliott Associates's bid to block a shareholder vote on the planned $8 billion merger of two Samsung Group companies.
Ruled   Elliott Associates lost in court
Elliott Associates, which owns 7.1 percent of construction firm Samsung C&T Corp, argues the proposed all-stock offer from Cheil Industries, the Samsung Group's de facto holding company, undervalues C&T.

The deal would allow the heirs of patriarch Lee Kun-hee, who remains hospitalized since a May 2014 heart attack, to consolidate stakes in affiliates like smartphone maker Samsung Electronics Co Ltd and keep control of the group.

The Seoul Central District Court's ruling against the U.S. fund was widely expected, as most investors and analysts agreed the deal terms complied with South Korean regulations.

"The court's ruling validates the fairness of the merger ratio and affirms that legal requirements have been met," Samsung C&T said in a statement.

The C&T shareholder vote is scheduled for July 17 and approval remains far from certain. Some investors including Aberdeen Asset Management, APG Asset Management and Ilsung Pharmaceutical Co have publicly spoken out against the deal.

Samsung Group needs the support of least two-thirds of the votes cast at the C&T shareholder meeting for the deal to proceed.