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With four days left until a crucial shareholder vote on its proposed merger with Cheil Industries, Samsung C&T has made all-out efforts to woo individual swing voters in a battle with opponent U.S. activist hedge fund Elliott.
On Monday, the builder put an ad on the front page of newspapers, reading: “Dear Samsung C&T shareholders, we sincerely would like to ask for your support.”
The three-paragraph, text-based print ad explained the purpose of the merger, blamed Elliott for its bid to block the deal and asked for the support of shareholders.
The Samsung move indicates that it is targeting individual swing voters after its single largest shareholder National Pension Service reportedly decided to support the merger last Friday.
Samsung’s shift to individual shareholders came after a flood of Korean media reported that NPS, which holds an 11.21 percent voting stake in Samsung C&T, internally decided to back the merger after a lengthy meeting of the NPS Investment Committee on Friday.
The NPS would neither confirm nor deny the news reports, said NPS spokeswoman Chi Young-hye. Under its internal policy, the NPS is banned from revealing its stance on the deal before the shareholders meeting.
“Despite the positive signal from the NPS, it is too early to pop champagne. We still need more friendly shares for a win in the incoming vote showdown,” a corporate insider close to the matter said on the condition of anonymity.
Some local media reports said over the weekend that Samsung C&T executives and employees tried to hold one-on-one meetings with individual shareholders nationwide with more than 1,000 shares of Samsung C&T in an aim to convince them to vote in support of the company’s merger plan.
It is rare for a Samsung unit to mobilize its workforce to interact with minority shareholders, which may mean that the company is not confident about the vote result yet.
Considering the heated attention on the vote showdown, industry watchers said more than 80 percent of Samsung C&T shareholders could exercise their voting right directly or indirectly at the July 17 shareholders meeting. In this case, Samsung C&T needs about 53.33 percent of stakes in favor to push for the deal.
It is necessary for the builder to secure additional friendly shares from individual shareholders who hold a combined 24.33 percent stake, because the majority of foreign shareholders are expected to side with Elliott.
Foreign shareholdings, other than the 7.12 percent stake that Elliott holds, are high, totaling around 26.41 percent.
Meanwhile, as part of its continued efforts to block the Samsung deal, Elliott sent its Hong Kong-based portfolio manager James Smith to Korea and gave an interview to Hankyoreh, a local progressive newspaper.
In the interview, published Monday, Smith expressed his confidence in the vote result, saying that a satisfactory result for his side was drawn in every possible voting scenario.
He encouraged all shareholders of Samsung C&T to exercise their rights to protect their financial interests by voting “No.” The U.S. fund has opposed the deal, claiming that the stock exchange ratio for the merger between the two Samsung units, designed for the generational power shift at Samsung Group, is unfair for Samsung C&T shareholders.
In a related development, progressive civic groups, including Citizens’ Coalition for Economic Justice, hosted a press conference in Seoul on Monday and criticized NPS for its alleged decision to support the Samsung deal. The anti-chaebol civic group urged the nation’s largest investor to reveal its decision process and rationale in a transparent way.
By Seo Jee-yeon (jyseo@heraldcorp.com)
On Monday, the builder put an ad on the front page of newspapers, reading: “Dear Samsung C&T shareholders, we sincerely would like to ask for your support.”
The three-paragraph, text-based print ad explained the purpose of the merger, blamed Elliott for its bid to block the deal and asked for the support of shareholders.
The Samsung move indicates that it is targeting individual swing voters after its single largest shareholder National Pension Service reportedly decided to support the merger last Friday.
Samsung’s shift to individual shareholders came after a flood of Korean media reported that NPS, which holds an 11.21 percent voting stake in Samsung C&T, internally decided to back the merger after a lengthy meeting of the NPS Investment Committee on Friday.
The NPS would neither confirm nor deny the news reports, said NPS spokeswoman Chi Young-hye. Under its internal policy, the NPS is banned from revealing its stance on the deal before the shareholders meeting.
“Despite the positive signal from the NPS, it is too early to pop champagne. We still need more friendly shares for a win in the incoming vote showdown,” a corporate insider close to the matter said on the condition of anonymity.
Some local media reports said over the weekend that Samsung C&T executives and employees tried to hold one-on-one meetings with individual shareholders nationwide with more than 1,000 shares of Samsung C&T in an aim to convince them to vote in support of the company’s merger plan.
It is rare for a Samsung unit to mobilize its workforce to interact with minority shareholders, which may mean that the company is not confident about the vote result yet.
Considering the heated attention on the vote showdown, industry watchers said more than 80 percent of Samsung C&T shareholders could exercise their voting right directly or indirectly at the July 17 shareholders meeting. In this case, Samsung C&T needs about 53.33 percent of stakes in favor to push for the deal.
It is necessary for the builder to secure additional friendly shares from individual shareholders who hold a combined 24.33 percent stake, because the majority of foreign shareholders are expected to side with Elliott.
Foreign shareholdings, other than the 7.12 percent stake that Elliott holds, are high, totaling around 26.41 percent.
Meanwhile, as part of its continued efforts to block the Samsung deal, Elliott sent its Hong Kong-based portfolio manager James Smith to Korea and gave an interview to Hankyoreh, a local progressive newspaper.
In the interview, published Monday, Smith expressed his confidence in the vote result, saying that a satisfactory result for his side was drawn in every possible voting scenario.
He encouraged all shareholders of Samsung C&T to exercise their rights to protect their financial interests by voting “No.” The U.S. fund has opposed the deal, claiming that the stock exchange ratio for the merger between the two Samsung units, designed for the generational power shift at Samsung Group, is unfair for Samsung C&T shareholders.
In a related development, progressive civic groups, including Citizens’ Coalition for Economic Justice, hosted a press conference in Seoul on Monday and criticized NPS for its alleged decision to support the Samsung deal. The anti-chaebol civic group urged the nation’s largest investor to reveal its decision process and rationale in a transparent way.
By Seo Jee-yeon (jyseo@heraldcorp.com)
