Samsung that is pushing for merging Samsung C&T and Cheil Industries took National Pension that is its second largest stockholder as its ally. It is at a point where it is almost turning the corner as National Pension is for the merger. No one can know the outcome however as foreign investors that are against the merger can form a new group unexpectedly. It seems that competition between Samsung and Elliott in securing stakes will reach its highest point by targeting minority and foreign shareholders including general meeting of shareholders that is happening on the 17th.
National Pension Fund Investment Office decided that it is for the merger after discussing by holding an investment committee on the 10th. It is predicted that there would be possibilities that it might leave its decision to foreign consultative body such as specialized committee for exercising one’s vote, it decided to decide on that day considering the importance of this issue. Benefits from increased stocks due to improvement of management structure, concerns about attacks from foreign speculation funds can be more aggressive after going against it ultimately resulted in them on their decision.
National Pension is the greatest shareholder out of single shareholders by having 11.21% of Samsung C&T’s stake, and that is why Samsung saw National Pension as the key to finalizing this merger. President Kim Shin of Samsung C&T’s Trading Department said that this merger will definitely happen if National Pension is on our side.
There are still variables in minority shareholders however because it is estimated that more foreign investors will be against it as foreign voting right consultative bodies such as ISS are against it. Last 3 years of attendance rate of shareholders in Samsung C&T’s regular general meeting of shareholders was about 60%. For merge plan to be approved, more than 2/3 of shareholders that are in attendance and 1/3 of all shareholders need to be for it. Suppose attendance ratio was to be 70 to 80% concerning the importance of this issue, 46.7 to 53.3% need to be for it.
Samsung group’s stake in special relationship that includes Chairman Lee Kun Hee (1.41%) of Samsung Electronics and stakes from each affiliate is 13.82%. Total of just definite amity stakes including KCC (5.96%) that decided to be a white knight after purchasing Samsung C&T’s treasury stock, UBS Hana Asset Management that recently decided to support Samsung, and National Pension is 31.01%. Total of stakes of shareholders that are against the merger such as third biggest shareholder Elliott that possesses 7.12%, Mason Capital (2.2%), Ilsung Pharmaceuticals (2.20%), and Canada Pension Plan Investment Board (0.15%) is 11.67%.
It seems that competition in securing amity stakes between Samsung and Elliott will reach its highest point at the last moment because there are still additional minority shareholders and undecided foreign investors left that take up about 24.43%. It is predicted that Korean institutional investors that take up about 11.05% will be for the merger, but ratio of foreign investors that take up about 26.41% and against the merger will be generally high.
Samsung released its plan to running Samsung C&T shareholder amity policy after its merger on the 10th. This gives shape to shareholder amity policy that was announced on the 30th of June. Operation of governance committee to protect rights and interests of actual shareholders, communication with shareholders on a regular basis, and expansion of society contribution fund are its main points.
Regarding this, Elliott submitted its statement for shareholders that describes its appeals for shareholders to join Elliott in going against this merger policy that have Cheil Industries proposing undervalued price of Samsung C&T intentionally.
■Current process of Samsung C&T’s shareholders (As of June 11. 2015)
▲ Samsung and KCC take up 19.78% of the stock, which is divided into Samsung’s special relationship (13.82%) and KCC (5.96%). 13.82% is divided into Samsung SDI (7.39%), Samsung Fire (4.79%), Chairman Lee Kun Hee (1.41%), Samsung Welfare Foundation (0.15%), and Samsung Culture Foundation (0.08%).
▲ National Pension (22.26%) is divided into National Pension (11.21%) and excluding National Pension (11.05%).
▲Foreigners (33.53%) is divided into Elliott (7.12%) and excluding Elliott (26.41%).
▲ Minority shareholders take up 24.43%. (Reference= Data Analysis, Retrieval and Transfer System)
Staff Reporter Choi, Ho | snoop@etnews.com