Samsung is reportedly considering splitting itself into two as proposed by Elliott Management, the US hedge fund management firm.The split would allow the Lee family to strengthen their grip on Samsung, the global smartphone leader. The split was proposed in October by Elliott to boost shareholder value, according to the Seoul Economic Daily, quoted by Finance Appraise.
Samsung’s board of directors will meet on Tuesday and respond to Elliott’s proposals, the newspaper said. The Korea Exchange separately asked Samsung to comment by 6 p.m. (0900 GMT) on whether it planned a spinoff. The company did not immediately comment on the newspaper report. The hedge fund wants Samsung Electronics to divide into a holding vehicle for ownership purposes and an operating company, pay a $26 billion special dividend, pledge to return at least 75 percent of free cash flow to investors and agree to appoint some independent directors.
In May last year, Jay Y Lee assumed charge as head of two key foundations. Since his father was admitted to the hospital, Jay Y Lee has been taking all major decisions for the vast conglomerate, which includes Samsung Electronics. Samsung sold its non-core assets in 2015 to consolidate stakes in key affiliates under a company controlled by Jay Y Lee and his two sisters.
“Even if Samsung Electronics does not comment on specifics such as the timing of a split … the firm will at least say it will implement ownership structure changes in a reasonable manner,”
-HI Investment said in a report on Monday.