SEOUL-—Cheil Industries Inc., the Samsung conglomerate's de
facto holding company, said Tuesday it would boost dividends and
establish a corporate governance committee -- but only after a
contentious merger with Samsung's construction and trading company
is approved by shareholders.
The shareholder-friendly remarks, together with a potential
public listing of Samsung's biopharmaceutical company on the Nasdaq
Stock Market, are the latest moves by South Korea's largest
conglomerate to convince shareholders to approve Cheil Industries'
planned merger with Samsung C&T Corp.
The two Samsung affiliates announced merger plans last month,
part of a broad restructuring of the sprawling Samsung conglomerate
that would help ensure the controlling Lee family's hold on crown
jewel Samsung Electronics Co.
But in early June, U.S. hedge fund Elliott Associates LP
disclosed a 7.1% stake in Samsung C&T and sought a court
injunction to block the deal, which it called unfair to Samsung
C&T shareholders. A South Korean court is set to rule on
Elliott's injunction on Wednesday, ahead of a shareholder vote on
July 17.
Cheil Industries' promise of increased dividends and corporate
governance oversight appeared to target Elliott's allegations of
weak minority shareholder protection at Samsung C&T, which owns
4.1% of Samsung Electronics.
Also speaking Tuesday at an analyst event hosted by Cheil
Industries, the chief executive of biopharmaceutical affiliate
Samsung Bioepis Co. said the company would consider seeking a
Nasdaq listing -- seen by some analysts as an attempt to highlight
the purported synergy of a combination between Cheil Industries and
Samsung C&T.
Cheil Industries and Samsung Electronics together own nearly all
of Samsung Bioepis.
Shares in Cheil Industries rose 1.2% after gaining as much as
4.3% in Tuesday morning trading in Seoul, while Samsung C&T
shares were unchanged after an earlier intraday advance of
2.4%.
A spokesman for Elliott didn't immediately reply to a request
for comment.
Write to Jonathan Cheng at jonathan.cheng@wsj.com
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