The plan was originally mooted by US activist hedge fund Elliott Management.
According to the Seoul Economic Daily the split give the heirs of the founding Lee family a much stronger hold on the global smartphone outfit. Elliott suggested the split in October to boost shareholder value.
Samsung’s board of directors will meet on Tuesday and respond to Elliott’s proposals. Samsung Electronics is not saying anything.
If it follows the House of Elliott plan, Samsung Electronics is to divide into a holding vehicle for ownership purposes and an operating company. It will pay a $26 billion special dividend, pledge to return at least 75 percent of free cash flow to investors and agree to appoint some independent directors.
The conglomerate’s reorganisation efforts have accelerated since Jay Lee took over the reins after his father and Samsung patriarch Lee Kun-hee was incapacitated following a May 2014 heart attack.
It has flogged off non-core assets and merged two affiliates in 2015 to consolidate stakes in key affiliates under a company controlled by Jay Lee and his two sisters.
“Even if Samsung Electronics does not comment on specifics such as the timing of a split … the firm will at least say it will implement ownership structure changes in a reasonable manner,” HI Investment said in a report.