Samsung C&T to appeal ruling on share buyback price (updated)
31/05/2016 02:39
(Updates with comments from C&T and analyst, market reaction,
background)
SEOUL, May 31 (Reuters) - South Korea's Samsung C&T Corp
028260.KS said it plans to appeal against a court ruling
ordering it to pay five shareholders more for a buyback offered
during a merger last year that consolidated stakes in Samsung
Group SAGR.UL affiliates.
The deal combined construction firm Samsung C&T and fashion
and theme-park operator Cheil Industries Inc into a merged
entity also called Samsung C&T. Some investors such as U.S.
activist hedge fund Elliott Associates opposed the deal saying
it undervalued the construction firm.
The Seoul High Court ruled that five shareholders who sued
C&T for more money - Ilsung Pharmaceutical 003120.KS and four
individual investors - should be offered 66,602 won ($55.92) per
share for the stock they held in the construction firm prior to
the merger, compared with 57,234 won offered last year.
The ruling could raise the price of the merger for the
Samsung Group by about $26 million, according to calculations
based on the shares held by the plaintiffs.
As the order applied only to the five plaintiffs, it was not
immediately clear if it would affect other shareholders who had
already made the transaction at the lower price.
Samsung C&T said the decision was "inconsistent" with
rulings made in related cases.
"After a thorough review of the court's rulings, we plan to
file an appeal with the Supreme Court," it said in an e-mail
statement.
Investors shrugged off the news, with Samsung C&T shares
trading unchanged as of 0134 GMT against a 0.1 percent rise for
the broader market .KS11 .
"There's no particular reason why the share price should
react," said IBK Securities analyst Kim Jang-won. "It's not like
the company will split up again because of this ruling."
($1 = 1,191.0000 won)
(Reporting by Jee Heun Kahng and Se Young Lee; Editing Stephen
Coates)
((vincentsy.lee@thomsonreuters.com; +822 3704 5646; Reuters
Messaging: vincentsy.lee.thomsonreuters.com@reuters.net; follow
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Keywords: SAMSUNG C&T M&A/CHEIL INDUSTRIES