Hwang defends Samsung against ‘vulture’ fund

Domestic institutional investors are expected to support the merger plan between Samsung C&T and its sister company Cheil Industries as the head of local investors’ association categorized U.S.-based hedge fund Elliott Management as a speculator looking for short-term gains.

Elliott, the largest foreign investor in Samsung’s construction and trading arm with a 7.12 percent stake, has opposed the merger, saying it would dampen the value of shareholders. 

In a recent interview with a local news agency, Korea Financial Investment Association chairman Hwang Young-key said the veto against the merger is akin to surrender to a foreign “vulture’’ fund, which will make Korean conglomerates vulnerable to similar attacks by other foreign short-term profit seekers.

“Investors in Samsung C&T need to make a wise decision (to raise the value of shareholders), ’’ he said.

Industry watchers said his remark could affect the vote of domestic institutional investors on the Samsung merger plan at the shareholders meeting scheduled for July 17.

Local institutional investors, whose combined stake in Samsung C&T reaches around 11.4 percent, have emerged as a casting vote in the showdown between Samsung C&T and Elliott at the meeting.

Their stake in Samsung C&T is more than the 10 percent-stake of National Pension Service, the single biggest shareholder.

Along with Hwang, chief investment officer of Shinyoung Asset Management Huh Nam-kwon has also openly supported the proposed merger.

“If Samsung C&T becomes a holding company, there is a higher chance that its value will rise in the long run,” Huh was quoted as saying by the local media.

He also echoed Hwang, saying that the deal should be accepted in line with the market sentiment.

By Suk Gee-hyun (monicasuk@heraldcorp.com)