Ilsung Pharmaceutical, a South Korean drugmaker with a 2.11 percent stake in Samsung C&T Co., said Sunday Samsung Group’s bid to merge the construction and trade arm with Cheil Industries Co. is “unfair” for shareholders.
“It will not be easy to have the merger plan approved at the shareholders’ meeting,” said Yoon Seok-keun, who heads Ilsung Pharmaceutical, indicating it will likely vote against the bid at the shareholders’ meeting slated for July 17.
“Share prices do not always reflect a firm’s value in details,” Yoon said, indicating the merger ratio of 0.35 Cheil Industries share for one Samsung C&T share seems unfair. “It is unreasonable to set such a ratio based on share prices of a few-month period.”
While Yoon did not directly said the company will vote against Samsung, he said “we basically do not agree with any moves that damage Ilsung Pharmaceutical’s right as a shareholder.”
Samsung’s proposed merger is widely seen as aiming to pave the way for the transfer of power from hospitalized tycoon Lee Kun-hee, South Korea’s richest man, to his only son Jay-yong.
Shortly after the announcement, U.S.-based hedge fund Elliott Management, which holds a 7.12 percent stake in Samsung C&T, also bought the public’s attention by openly expressing discontent against the bid.
The merger plan has sparked a debate over the pros and cons.
Some claim Samsung’s move only benefits the group’s owner family, while others insist that Elliott is abusing its rights as a shareholder.
On Thursday, Samsung C&T asked its shareholders to delegate their voting rights to the company, a day after the hedge fund made the same request.
In an apparent bid to gird for a showdown at the shareholders meeting, Samsung C&T also offloaded 5.76 percent of treasury shares to ally KCC Corp., which Elliott claimed illegitimate. (Yonhap)
