Samsung asked to confirm split-off plan
[THE INVESTOR] The Korea Exchange, the nation’s bourse operator, on Nov. 28 asked Samsung Electronics to confirm a recent report on its possible split-off into holding and operating companies. The response has to be given by 6 p.m.
On Nov. 27, Seoul Economic Daily reported that the Korean tech giant will consider splitting itself into two as proposed by activist hedge fund Elliott Management last month, citing unnamed sources.
The paper said Samsung’s board of directors would hold a meeting on Nov. 29 and respond to Elliott’s proposals, including raising dividends for shareholders as well as the organizational split-off.
Amid growing demand for more benefits for investors, Samsung has hinted it would come up with new shareholder policies by the end of November.
Sources predict the tentative direction of the new scheme, rather than detailed plans, could be unveiled after the meeting.
Samsung is preparing for a pending leadership transfer to a new generation. The heir apparent, Samsung Electronics Vice Chairman Lee Jae-yong has raised his stake in the company, Samsung Group’s flagship unit.
After the possible split-off, Lee is likely to seek a higher stake in the holding company that would allow him to wield more power across other affiliates.
Lee, together with his father, the ailing Samsung patriarch Lee Kun-hee, owns less than 4 percent stake in the company. The combined favorable stake, including those owned by other Samsung companies, is estimated to be about 18 percent.
By Lee Ji-yoon (firstname.lastname@example.org)