Elliott Management may have lost the first round in its battle against the Samsung C&T-Chiel Industries merger, but an unlikely friend has just showed up to back them up in round two, proxy adviser Glass Lewis & Co.
According to Reuters, the firm released a note Wednesday saying that “Cheil Industries Inc’s $8 billion all-stock offer was “profoundly unattractive” for C&T investors and “exceedingly advantageous” for Cheil shareholders,” adding:
“We believe SCT (Samsung C&T) investors should reject the arrangement and encourage the board to more thoroughly consider alternatives available to the company.”
Institutional Shareholder Services Inc, or ISS, is also set to issue its own recommendation this week, which I speculate to be in-line with Glass Lewis’ and Elliott’s stance. Several other company shareholders such as Aberdeen Asset Management and Ilsung Pharmaceutical Co have also voiced their outrage over the deal.
A Samsung C&T spokesman however told Reuters that “the proposed merger was in accordance with the law and that the company wanted to boost shareholder value.”
With Chiel valuing its target at $8 billion, this Bloomberg piece pegs Samsung C&T’s group company shareholdings at $10.7 billion. I’m not sure what shareholder value it’s talking about either.
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