Institutional Investors to Act as Swing Voters with More Than 20 Pct Shares of Samsung C&T

The state-run National Pension Service (NPS), the biggest institutional investor in South Korea, and other institutions owned 21.6 percent of Samsung C&T common shares as of June 16, according to the sources. (image: Yonhap)

SEOUL, June 23 (Korea Bizwire) — South Korean institutional investors own more than 20 percent of Samsung C&T, which could serve as the swing vote on its high-stakes fight with a U.S. hedge fund over a controversial merger plan, market sources said Tuesday.

The state-run National Pension Service (NPS), the biggest institutional investor in South Korea, and other institutions owned 21.6 percent of Samsung C&T common shares as of June 16, according to the sources.

The NPS is the largest shareholder with a 10.15 percent stake, with 0.3 percent owned by Teachers’ Pension. Eight asset managers here hold about 0.1 percent each.

Their votes are crucial for Samsung Group, South Korea’s top conglomerate, to push through its 8.9 trillion won (US$8.08 billion) plan to merge the builder with Cheil Industries, the group’s de facto holding firm.

Samsung C&T is expected to put the proposed merger up for a vote at a shareholder meeting slated for July 17.

Elliott Management, the third-largest shareholder of Samsung C&T, has opposed the move, accusing Samsung of pushing ahead with a shake-up by sacrificing C&T’s value and its shareholders’ interests for the leadership transfer at the conglomerate.

Amid the intensifying battle between Samsung and Elliott, analysts here agreed to a view that the institutional investors won’t likely vote against the merger plan since many of them also hold stakes in Cheil Industries.

“The failure of the deal would send Cheil shares to plunge and that is what those that have shares in both firms are concerned about,” an official from an asset manager said, on condition of anonymity.

Cheil Industries, formerly known as Samsung Everland, was listed on the main Seoul bourse in December last year after a restructuring of its own in the same year.

Even before its market debut, Cheil had emerged as a hot stock among investors since the majority of its shares are controlled by the chairman Lee Kun-hee and his three children.

Market sources showed that local institutions have scooped up a combined net 583.6 billion worth of Cheil shares up until Friday since its listing, while unloading some 411.3 billion-won C&T shares over the same period.

Foreigners hold together a 26.49 percent stake in the builder, including the 7.12 percent owned by Elliott as of June 16, according to analysts.

But it is uncertain how many of them will side with Elliott against the merger plan at the shareholder meeting, because many of them also apparently hold stakes in Cheil Industries, analysts added.

(Yonhap)