Samsung C&T proposed to its shareholders who were against the merger that it would buy back their holdings at a set value of 57,234 won (US$48) per share based on the then stock price. (image: Yonhap)
SEOUL, May 31 (Korea Bizwire) – An appeals court ordered Samsung C&T Corp., the fashion and trading arm of South Korea’s top conglomerate, to increase the stock purchase price proposed to shareholders who were opposed to the company’s merger last year, court records showed Tuesday.
Last year, Samsung C&T was formed out of a merger between then Samsung C&T and then-Cheil Industries to become the group’s de facto holding firm. The merger was part of the group’s efforts to streamline its structure through big shakeups of its affiliates.
Samsung C&T proposed to its shareholders who were against the merger that it would buy back their holdings at a set value of 57,234 won (US$48) per share based on the then stock price.
Minority shareholders and Ilsung Pharmaceuticals Co., a local drugmaker which held a 2.11 percent stake in then-Samsung C&T, filed a suit, seeking adjustment of the purchase price, which they said was too low.
Overturning a lower court’s decision, the Seoul High Court said the price should be increased to 66,602 won, which was the market price before speculations on the merger started to loom in the industry. A lower court had dismissed the suit in January, saying the price was reasonable.
The appeals court said there are considerable reasons to believe that the low stock price was intended to benefit the Samsung Group.
U.S. hedge fund Elliot Associates had also filed a similar suit but dropped the case in March after reaching an agreement with Samsung C&T.
“It is not easy for the company to accept the ruling as it is so different from any other court decision made in the process of the merger,” Samsung C&T said, adding it would appeal the ruling. It also flatly denied allegations that the fall in the stock price was the result of manipulation.
The legal representative of the plaintiffs also said they will appeal, saying the price proposed by the court is still too low.
(Yonhap)
