Hyundai Merchant Marine Co., the biggest unit of Korea’s Hyundai Group, surged in Seoul trading after shareholders rejected a proposal to increase the preferred stock sales limit, raising speculation it may become a takeover target.

Hyundai Heavy Industries Co., owner of a 23.8 percent stake in Korea’s second-biggest shipping line, and three other companies with holdings voted against the plan at a shareholders meeting, Hyundai Group said in a statement Friday.

The opposition by Hyundai Heavy and companies owned or managed by family members of the divided Hyundai empire shows the company intends to take over Hyundai Merchant, according to Hyun Jeong-eun’s Hyundai Group.

“The action by Hyundai Heavy shows that Hyundai Heavy hasn’t given up its ambition to take over Hyundai Merchant,” Hyundai Group said in the statement. “They have also blocked Hyundai Merchant’s plan to invest in the future and that could eventually undermine shareholders’ value.” 

Hyun took over the management of Hyundai Group after her husband Chung Mong-hun committed suicide in 2003. She lost to her brother-in-law and Chairman of Hyundai Motor Group, Chung Mong-koo, in a bidding contest for control of Hyundai Engineering & Construction Co. earlier this year.

Hyundai Heavy, Hyundai Department Store Co., Hyundai Development Co. and KCC Corp. rejected the plan to increase the limit of preferred shares to 80 million from 20 million, Hyundai Group said. KCC is owned by Chung Mong-koo’s uncle.

“We opposed the plan because it wouldn’t be in the best interest of the shareholders, nothing more or less,” Hyundai Heavy said today in an e-mailed statement. “If the company really needs the money, they can always use the 120 million of common shares available to them.”

Hyundai Merchant planned to use the funds to expand its fleet to compete against bigger rivals such as A.P. Moeller-Maersk A/S and Orient Overseas (International) Ltd., which have ordered new vessels this year as global trade expands, according to the Hyundai Group statement. 

(Bloomberg)