Elliott Associates, the activist hedge fund headed by Paul Singer acquired a stake in Samsung Fire & Marine Insurance according to report from Reuters based on information obtained from the spokesperson of the South Korean company on Monday.
Samsung Fire & Marine Insurance is a subsidiary of Samsung Group and a shareholder of Samsung C&T.
Elliott Associates bought 1% stake in Samsung Fire & Marine Insurance for approximately 200 billion won or $178 million. The Chosun Ilbo first reported about the activist hedge fund’s investment based on information from unidentified banking and industry sources.
The activist hedge fund also owns 1% stake in Samsung SDI Co. Ltd., which is also a shareholder in Samsung C&T.
Elliott Associates further strengthens campaign against Samsung C&T merger
Market observers suggested that Elliott Associates bought shares of Samsung Fire & Marine Insurance to strengthen further its initiative to block the proposed merger of Samsung C&T and Cheil Industries. The proposed merger is considered as the key step for Lee Jae Yong to tighten his family’s control over Samsung Group.
The activist hedge fund believed that the proposed merger was “unfair and unlawful,” and it is significantly damaging to the interests of Samsung C&T shareholders.
Elliott Associates is the third largest shareholder of Samsung C&T with 7.1% stake in the company. The activist hedge fund filed court injunctions to prevent the proposed merger. Some of Samsung C&T’s shareholders support Elliott Associates.
Elliott obtains more leverage over Samsung C&T merger
Commenting on the latest move of Elliott Associates, Park Ju-gun, head of corporate at CEO Score said the activist hedge fund obtained more advantage over the fate of Samsung C&T and Cheil Industries merger proposal and the restructuring of Samsung Group.
“Samsung Group has no certainty over Chairman Lee Kun-hee’s condition, so they are trying to wrap up the restructuring process within this year, and I think Elliott knows that,” said Park.
An investor with at least one percent stake in a company could file a lawsuit against its board of directors under the South Korean law. The investor is allowed to find out the other shareholders in the company.