Samsung merger opposed by the House of Elliott

elliotA US hedge fund, named after a BBC costume drama,  is challenging a merger between Samsung companies which appears to be an attempt to make sure control of the outfit passes to the founder’s grandson.  .

Elliott is the third largest shareholder of Samsung C&T, which is part of the Samsung group of companies. It said it started “legal proceedings for an injunction” at a court in South Korea to prevent what it called an “unlawful” takeover deal.

The activist investor said the proposed takeover of Samsung C&T by Samsung Group’s de facto holding company, Cheil Industries, was unfair to shareholders.

Since announcing its 7.12 percent stake in Samsung C&T last week, the hedge fund has stepped up its campaign to urge other shareholders to oppose the takeover, saying the deal significantly undervalues C&T.

Samsung announced the takeover deal last month, claiming it was a strategic move to create a global lifestyle and biotechnology company.

Investors, think it is all a cunning plan to put Lee Jae-yong, the Samsung founder’s grandson’s, fingers in the pie of Samsung Electronics.

Lee is the biggest shareholder in Cheil Industries and Samsung C&T owns a 4.1 stake in Samsung Electronics.

Cheil plans to complete its takeover of C&T, a much bigger company by assets and revenues, by issuing 0.35 new Cheil shares for each C&T share. After the proposed deal, Lee would become the largest shareholder in the combined entity with a 16.5 percent stake.

The deal was announced when C&T’s share price was near a five-year low, and Cheil’s shares were close to their highest in five years.