SEOUL, July 1:A South Korean court today ruled in favour of the proposed merger of two Samsung Group subsidiaries, rejecting a US hedge fund’s request for a court order to stop the move.
US hedge fund Elliott had asked for a court injunction to stop Cheil Industries acquiring Samsung C&T Corp through an all-stock deal, a move by Samsung’s founding Lee family to boost control over the conglomerate ahead of a generational power transfer.
“The court rejected the request from Elliott,” a court spokesman told AFP.
Elliott had filed two lawsuits, one of which called for a court order to prevent a Samsung shareholders’ meeting on July 17 to approve the proposed merger.
The hedge fund, which holds a 7.12 per cent stake in Samsung C&T, says the terms of the proposed takeover by Cheil Industries “significantly undervalue” Samsung C&T shares.
But the Seoul Central District Court said in the ruling: “The merger ratio was calculated in accordance with relevant laws… And cannot be seen as unfair”.
The ratio of the merger is 0.35 Cheil Industries shares for each Samsung C&T share.
Elliott also said the merger proposal as presented by Samsung C&T’s management carried with it “very limited evidence of the claimed synergies and benefits”, arguing it was aimed at facilitating a father-to-son power transfer of the powerful Samsung Group rather than acting in the interest of shareholders.
The court, however, ruled: “There is no evidence either that the merger is being pursued only for the interest of the Samsung Group’s family members, regardless of other shareholders’ interests”. (AGENCIES)
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