Seoul, South Korea – A South Korean appeals court has rejected a claim by U.S. hedge fund Elliott Management against Samsung C&T, upholding a lower court’s decision. The Seoul High Court’s 16th Civil Division ruled on May 29th that Samsung C&T is not obligated to pay Elliott Management 26.7 billion won (approximately 140 million RMB) in delayed compensation.
The case stems from Elliott Management’s opposition to the 2015 merger between Samsung C&T and Cheil Industries (formerly First Industries). Elliott, a significant shareholder in Samsung C&T at the time, argued that the merger undervalued Samsung C&T’s shares and sought to block the deal.
As part of its opposition, Elliott Management filed for Samsung C&T to purchase its shares. Samsung C&T offered a price of 57,234 won per share. Dissatisfied with this valuation, Elliott Management initiated a lawsuit demanding a higher appraisal of the stock’s value.
In March 2016, the two parties reached a confidential agreement. A key provision stipulated that if litigation with other shareholders resulted in a change in the acquisition price, Samsung C&T would compensate Elliott Management for the difference based on the revised price.
This ruling marks the latest chapter in a long-running dispute between Elliott Management and Samsung. The hedge fund has a history of activist investing, often targeting companies it believes are undervalued or poorly managed.
The court’s decision is a victory for Samsung C&T and a setback for Elliott Management. It remains to be seen whether Elliott will pursue further legal action in this case. The implications of this ruling could also affect future shareholder disputes and merger and acquisition activities in South Korea.
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