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Reuters

US-based hedge fund Elliott on Thursday said it has taken a major stake in South Korea’s Samsung C&T Corp and opposes Cheil Industries Inc’s US$8 billion takeover offer, in a challenge to Samsung Group’s restructuring efforts.
The move is the first significant opposition to a merger which investors and analysts believe is crucial to a smooth succession of power at South Korea’s top family-run conglomerate.
"Elliott believes that Cheil Industries’ proposed takeover of Samsung C&T significantly undervalues Samsung C&T and that the terms are neither fair to nor in the best interests of Samsung C&T’s shareholders," Elliott said in a statement.
Elliott’s comments came as it revealed it holds a 7.1 per cent stake in construction company Samsung C&T Corp. It was not immediately clear when the shares were all acquired, though the filing said the fund spent 216 billion won (US$194.94 million) on the shares.
Shares of Samsung C&T and Cheil Industries opened sharply higher on Thursday after the announcement.
A Samsung C&T spokesman did not immediately comment, while Cheil Industries and Samsung Group could not immediately be reached for comment.
Elliott becomes the third-largest single shareholder in Samsung C&T behind the National Pension Service and Samsung Group sister firm Samsung SDI Co Ltd, according to Thomson Reuters data.
A merger between Samsung C&T and Cheil Industries would combine various stakes in the group held by heirs of patriarch Lee Kun-hee, who has been in hospital since suffering a heart attack a year ago.
Elliott is also involved in a row with the family controlling Bank of East Asia when the bank executed a nearly US$1 billion share sale and placement to Japan’s Sumitomo Mitsui Banking Corp.
BEA said the subscription was an opportunity to broaden its capital base and strengthen its position to meet upcoming Basel III regulations.
Elliott claims the placement is designed to entrench management and ownership control by the bank’s founding family and discriminates against the interests of independent investors. Elliott’s interest is motivated by its HK$1.8 billion or 2.5 per cent stake in BEA.
 


US fund Elliott challenges Cheil takeover offer for Samsung C&T Corp

The company headquarters of Samsung C&T, where hedge fund Elliott has taken a major stake to challenge its takeover by Cheil Industries. Photo: AP

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.css-sioo19{color:#c79a00;}New | US fund Elliott challenges Cheil takeover offer for Samsung C&T Corp

New | US fund Elliott challenges Cheil takeover offer for Samsung C&T Corp