Court rejected Elliott’s request for injunction on notice of convocation of Samsung C&T Corp. general meeting of stockholders and resolution stoppage. General meeting of stockholders to resolute on the merger of Samsung C&T Corp. and Cheil Industries will happen on the 17th as it was planned. As Elliott’s opinion on thinking that percentage of merger is inappropriate for the basis of opposition on the merge is losing its power, brakes are being put on the gathering of stockholders.

Court deferred the decision on legitimacy of selling treasury stock that Samsung C&T Corp. sold to KCC. Decisions of global voting right advisory organization called ISS and National Pension Service (NPS), which is second stockholder of Samsung C&T Corp. are the variables.

◇Court raises Samsung C&T Corp.’s hand

Court rejected American hedge fund called Elliott Management’s request for injunction on notice of convocation of Samsung C&T Corp. general meeting of stockholders and resolution stoppage, which was brought up when it said percentage of merger of Samsung C&T Corp. and Cheil Industries is unfair to Samsung C&T Corp.’s stockholders. Court ruled that it is not unfair because stock prices weren’t formed according to fraudulent acts or act of controlling market price, but percentage of merger was set according to capital market laws.

Court also saw that ground information on judgment of optimal stock that Elliott submitted is just an information that did not go through detailed investigation such as business inspection by accounting firms. Its opinion that this merge is for largest stockholders also was not accepted.

This means more than just that convocation of general meeting of stockholders that was originally scheduled is happening. Not just a controversy about legitimacy of percentage of merger was resolved, but most of opinions that Elliott insisted los their strengths. Even this goes to voting of yes or no, there is more possibility now that this will lead to uniting voting rights for the merge.

◇Variables are left to ISS and NPS’s decisions

Focus is on the situation of uniting voting rights for yes or no. It is not currently decided whether KCC, which bought entire treasury stock (5.76%) of Samsung C&T Corp., will be able to exercise its voting right. Court will rule on the decision of Samsung C&T Corp.’s request of injunction to prevent voting rights of 8.99 million treasury stocks (5.76%) that KCC received from Samsung C&T Corp.

Global voting right advisory organization called ISS’s decision will affect considerably on foreign stockholders. ISS is a subsidiary company of American finance company called Morgan Stanley Capital International. It analyzes world’s main companies’ stockholder items and submits reports, and these have crucial effects on the direction of voting rights. ISS will submit reports on the merger in few days. Direction of NPS’s decision, which is second stockholder of Samsung C&T Corp., cannot be confirmed as well and it has 10.15% of Samsung C&T Corp.’s share. Samsung can exercise right of total of 19.78% (common stock) shares from 13.82% of shares that its affiliates such as Samsung SDI and Samsung Fire and owner’s family have and rest from shares that KCC has. If it is assumed that Elliott’s share of 7.12% is used on increasing foreign friendship stake, merger casting boat is in the hands of NPS.

Photo Image
<Choi ChiHoon President of Samsung C&T Corp. laughs at the result of the court ruling. Court rejected American hedge fund called Elliott Management’s request for injunction on notice of convocation of Samsung C&T Corp. general meeting of stockholders and resolution stoppage, which was brought up when it said percentage of merger of Samsung C&T Corp. and Cheil Industries is unfair to Samsung C&T Corp.’s stockholders. Court ruled that it is not unfair because stock prices weren’t formed according to fraudulent acts or act of controlling market price, but percentage of merger was set according to capital market laws.photo=The Electronic Times>

◇Samsung shows confidence

As President Choi Chi Hoon of Samsung C&T Corp. was coming out of conference for presidents that was held at Samsung Electronics Building, he said that current situation right now is to persuade stockholders continuously. At the question about how market’s response is after urgent IR, he said that stockholders felt the efforts that Samsung was putting such as listening to stockholders’ opinions. He also added that NPS will decide accordingly if it wants this nation and stockholders to do well while mentioning national interest.

He stressed the importance of communication when one is going for a merge and said that Samsung needs to focus on stockholders, especially minority shareholders. While he was mentioning that he visited Europe and South East Asia to persuade stockholders, he announced that he will visit foreign countries again if it is needed. He said that Samsung gives all information to Elliott since it is Samsung’s major shareholder, but Elliott hasn’t gave a suggestion about being in contact.

He showed cautionary stance at the chance of winning in general meeting of stockholders and condition of securing friendship stake by saying he is hoping for the best and he won’t know anything until the results come out. At the question of some in the business circle bringing up that Samsung C&T Corp. and Samsung Engineering will merge, he said that it never even started and there won’t be any more talks about it.

As President Kim Bong Young of Cheil Industries’ Resort and Construction Department was on his way to work, he said that he hopes the communication went well and that NPS will make a rational decision at the question of urgent IR’s result.

Staff Reporter Choi, Ho | snoop@etnews.com & Staff Reporter Seo, Hyeongseok | hsseo@etnews.com