Elliot Associates LP, U.S. hedge fund has decided to sell more than two thirds of its stake in Samsung C&T Corp. after losing a battle opposing a takeover by Cheil Industries Inc.
The hedge fund asked Samsung C&T Corp. to purchase 4.95% of its company shares back, which would leave Elliot Associates with 2.17% stake in Samsung C&T. News of this move sent the company’s stock down 3.5% today to 55,200 Won ($47.02).
Samsung’s holding company Cheil Industries announced plans to acquire Samsung C&T this May, which would allow heir apparent Lee Jae-Yong – also vice chairman of Samsung Electronics, greater stake in Samsung Electronics Co.
Samsung C&T gave their investors who oppose this deal – which would undervalue the company, the option to sell their shares back to Samsung C&T for a price of 57,234 won per share.
Analysts believe that the hedge fund can still use legal measures to block the merger, however the U.S. hedge fund Elliot Associates declined to comment on its next step. Elliot Associates noted that they will most importantly “continue to evaluate all of its options to uphold its rights and to protect the value of its investment, including in relation to the outcome of last month’s shareholder meeting.”