S Korea court rejects US hedge funds’ plea against Samsung

A South Korean court on Wednesday 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 <g data-gr-id="14">per cent</g> 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”.