NPS mulls options on merger vote

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NPS mulls options on merger vote


The National Pension Service, the largest shareholder in Samsung C&T, held an internal committee meeting Friday to decide whether or not the fund will outsource its decision on whether to approve the merger of the company and Cheil Industries.

But no decision was made as of press time at 7 p.m.

With 11.2 percent of the company’s shares, the state-run pension fund is expected to be the swing vote at Samsung C&T’s shareholder
meeting on July 17. Major shareholder blocs for and against the merger are roughly equal in size.

While the NPS entrusts its internal committee with voting rights in most cases, it sometimes turns to an external panel for tricky, high-stakes deals.

A total of 12 NPS members participated in the meeting, including Hong Wan-sun, chief investment officer.

The NPS appears torn on how to proceed.

On one hand, the pension fund is being encouraged to follow the advice of proxy voting advisers. Both a local proxy voting adviser and global advisory groups including Institutional Shareholder Services have recommended investors vote against the merger, saying it is not
in the best interests of investors.

On the other hand, the NPS could be wary of the impact if the all-stock merger falls through. The fund also owns a 5 percent stake in Cheil, a retail and fashion unit that will likely suffer if the deal falls through.

In the meantime, U.S. hedge fund Elliott Associates and Samsung continued to lock horns over the deal.

Elliott said many minority shareholders are now siding with it.

“The undeniable evidence of this outpouring of opposition is tens of millions of shares which have been confirmed as a vote against and/or provided as proxies for Elliott to oppose this proposed takeover,” it said Friday in a statement.
It also implicitly applied pressure to the NPS, saying, “We expect that the National Pension Service ? entrusted with hard-earned capital of ordinary Koreans ? will choose to make the proper financial decision to oppose these wholly unfair takeover proposals.”
In an effort to sway shareholders to its side, Samsung C&T unveiled detailed plans to ensure their interests once the merger is completed.

The company said it will invite three outside directors and two external experts to an independent corporate governance committee it plans to introduce after the merger to safeguard shareholders’ interests.

This is the first time Samsung has named such a committee.


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