Elliott Associates, the third-largest shareholder in Samsung C&T has filed an injunction to block a proposed $8bn merger of Samsung Group affiliates, Samsung C&T and Cheil.
This is the second injunction filed by Elliott with a South Korean court to stop the merger which would put ownership of the conglomerate into the hands of the founder’s family.
The merger will allow conglomerate’s controlling Lee family to combine its holdings and make way for an eventual power transfer, as founder Lee Kun-hee is ill and still hospitalised.
Under the proposed merger, Samsung C&T share will be exchanged for 0.35 of a share in Cheil Industries, for the creation of the new company which will also be named Samsung C&T.
The second injunction has been filed to stop Samsung C&T from selling treasury shares which amounts to a 5.8% stake to KCC in a bid that is expected to help gain KCC’s support for the proposed all-share takeover offer from Cheil Industries.
Elliott also increased its stake in Samsung C&T to 7.1% from the previous 5%, and said that the merger undervalues Samsung C&T.
Samsung however said that the company came to know about the injunction from news reports.
"As of now, Samsung C&T has not received any documents from any court concerning the legal proceedings mentioned above, and shall re-announce upon receipt of such documents," the statement added.
