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Samsung promises win over hedge fund Elliot as investor shrieks 'NO'

Cheil merger wrangles set to continue

By Kat Hall, 15 Jul 2015

A Samsung exec has vowed to offer up a "big" win in the company's "war" against shouty investment firm Elliot, as the battle hots up over its objection to Sammy's imminent merger.

In May, Sammy announced its merger with fashion, leisure and construction biz Cheil Industries, a company in which the tech giant already owns a sizable stake.

The move has been viewed as bolstering the power of the probable heir apparent Lee Jae-yong, as power passes from his ailing father.

After becoming the third biggest investor in the company last month, Elliot wasted no time mounting a legal challenge over the merger, claiming it was was "unlawful" and not in the interests of shareholders. That attempt was rejected by a court in South Korea earlier this month.

Now an extraordinary general meeting of Samsung C&T shareholders is being held on Friday to decide the fate of the proposed merger, which will need a two-thirds majority to go ahead.

Speaking to the Korea Times, Samsung Securities CEO Yoon Yong-am, said: "We should score a victory by a big margin in the first battle in order take the upper hand in a looming war against Elliott and keep other speculative hedge funds from taking short-term gains in the domestic market."

Elliot is rallying shareholders to oppose the merger. In case there were any doubts about its position, the shy and retiring fund underlined its key points using large, bold, capitalised letters.

It said: "This is your LAST CHANCE to protect the value of your investment in a business which has a long and successful history of producing value for its stakeholders, so we urge all Samsung C&T shareholders to vote “NO” to the wholly unfair Proposed Merger, at the EGM." ®

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