South Korea advisory firm recommends NPS vote against Samsung deal

By: | Published: July 8, 2015 9:07 AM

A South Korean advisory firm recommended the country's National Pension Service (NPS), a key shareholder of Samsung C&T Corp, vote against a proposed $8 billion takeover offer from sister firm Cheil Industries Inc.

A South Korean advisory firm recommended the country’s National Pension Service (NPS), a key shareholder of Samsung C&T Corp, vote against a proposed $8 billion takeover offer from sister firm Cheil Industries Inc.

The Corporate Governance Service (CGS) cited the proposed merger ratio as the key reason for its recommendation against the merger, an NPS spokesman told Reuters without elaborating, ahead of a shareholder ballot on July 17.

NPS, which owns 11.9 percent of C&T, could be the swing voter at the shareholder meeting. CGS, one of three such advisors to NPS, declined to comment on its recommendation. Samsung C&T could not immediately be reached for comment.

The Cheil-Samsung C&T merger, some investors and analysts say, is key to consolidating various stakes in top affiliates of the sprawling family-run Samsung Group ahead of a looming leadership succession.

U.S. hedge fund Elliott Associates, which has a 7.1 percent stake in Samsung C&T, has been calling on other investors to reject the deal, arguing that it undervalues C&T.

Cheil and Samsung C&T have been lobbying for shareholder support in recent weeks, promising higher payouts and improved corporate governance at the post-merger company.

Earlier on Wednesday, Samsung C&T co-Chief Executive Kim Shin told reporters that he hoped the NPS would vote for the deal.

Two influential U.S.-based proxy advisors last week said independent C&T shareholders should vote against the deal.

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