US fund Elliott files appeal against Samsung merger ruling

SEOUL, SOUTH KOREA: US hedge fund Elliott said Friday it had filed an appeal against a court ruling in favour of the proposed merger of two Samsung Group subsidiaries.

The Seoul Central District Court on Wednesday rejected a request from Elliott to stop Cheil Industries buying Samsung C&T Corp through an all-stock deal worth $8bn, a move designed to facilitate Samsung's founding Lee family's father-to-son succession.

"Elliott was disappointed with the recent first instance Court decision not to grant a preliminary injunction to prohibit Samsung C&T from seeking shareholder approval for the Proposed Takeover" at a shareholder's meeting on 17 July, the firm said in a statement.

"However, Elliott today filed a notice of appeal... and is confident that its position will be fully vindicated on appeal."

It said there was a "chorus of disapproval" from Samsung C&T shareholders over over the merger proposals, adding they are "neither fair nor in the best interests of Samsung C&T's shareholders".

But it remains to be seen whether an appeals court would have time to hand down a verdict on the case before the 17 July meeting. Elliott also filed a separate case seeking a court injunction against Samsung C&T's efforts to sell treasury shares to chemicals maker KCC Corp., which the hedge fund said was a move to bolster its hand at the shareholders' meeting.

KCC is a friendly shareholder of Samsung. Treasury shares are useless in voting as companies cannot vote for themselves. The court has not yet reached a decision on that issue, but said it would rule before 17 July.

Source: AFP