Court rejects bid to block Samsung treasury stock sale

GMT 07:36 2015 Tuesday ,07 July

Arab Today, arab today Court rejects bid to block Samsung treasury stock sale

Court rejects bid to block Samsung
Seoul - AFP

A South Korean court on Tuesday rejected a US hedge fund's request to block the sale of treasury stocks by construction firm Samsung C&T, clearing the path for the $8.0 billion merger of two Samsung affiliates.

The planned merger, which would see Cheil Industries acquire Samsung C&T Corp through an all-stock deal, is the latest in a series of moves by Samsung's founding Lee family to boost control over the conglomerate ahead of a generational power transfer.

The US hedge fund, Elliot Associates, which holds a 7.12 percent stake in Samsung C&T, has opposed the merger, arguing that it "significantly undervalues" the construction firm's stock.

The Seoul Central District court had already dismissed an Elliot demand to prevent a July 17 Samsung shareholders' meeting called to approve the proposed merger.

Tuesday's ruling rejected a second demand to halt Samsung C&T's sale of treasury stocks to a "friendly" shareholder, chemicals maker KCC Corp.

Elliot, which had argued that the sale was aimed at boosting the pro-merger vote at the shareholders' meeting, said it would appeal the ruling.

"We maintain our firm view that the deliberate sale of treasury shares, designed solely to support a fundamentally unfair deal for Samsung C&T's shareholders, was wholly improper," the hedge fund said in a press statement.

Samsung C&T welcomed the court's confirmation that the share sale met all legal requirements.

"We strongly believe that the proposed merger is in the best interest of the company and our shareholders," it said in a statement.

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