A court on Wednesday rejected a US hedge fund’s bid to block a shareholder vote on the planned US$8 billion merger of two Samsung Group companies seen as a key step in the leadership succession at South Korea’s biggest family-run conglomerate.
Elliott Associates, which owns 7.1 per cent of construction firm Samsung C&T Corp, argues the proposed all-stock offer from Cheil Industries Inc, the Samsung Group’s de facto holding company, undervalues C&T.
The deal would allow the heirs of patriarch Lee Kun-hee, who remains hospitalised 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 US 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.
Even so, Elliott’s aggressive intervention - it only revealed its stake in C&T a month ago - has shaken up the corporate scene in a country known more for the opacity of its family-run business empires than for shareholder activism.