Major holder set to oppose Harman sale

A large shareholder of Harman International is poised to oppose the U.S. automotive component’s sale to Samsung Electronics on the grounds that it is worth more than the planned purchase price of about $8 billion.

Alexander Roepers, founder and portfolio manager of Atlantic Investment Management, a U.S. investment advisory firm that owned a 2.31 percent stake in Harman as of September, told the Wall Street Journal that he would vote against the deal.

Samsung’s acquisition of Harman, also known for audio brands including JBL and Harman Kardon, was made public on Nov. 14 as the smartphone producer seeks to catch up with tech behemoths such as Apple and Google in the futuristic sector of connected cars. The Harman sale was set to become the largest overseas M&A deal any Korean company has sealed.

Samsung said that the transaction is subject to approval by Harman shareholders, regulatory approvals and other customary closing conditions and is expected to close in mid-2017.

Roepers was quoted as saying that he is “dismayed” that Harman didn’t attempt to find another bidder after Samsung arrived.

The purchase price of $112 per share represented a premium of 28 percent, based on Harman’s closing price on Nov. 11 and a 37 percent premium over Harman’s 30-calendar day volume weighted average price ending Nov. 11. The stock has traded around $110 since, “a relatively narrow spread that signals investors are confident the deal will close or betting that Harman could attract a higher bid,” said the Wall Street Journal.

Roepers argues Harman’s highs above $145 in April 2015 are proof that the company’s plans detailed in August could get the stock to nearly $200.

Samsung declined to comment on the report.

As of Sept. 30, Atlantic was Harman’s eighth-largest shareholder. The Vanguard Group had the largest stake at 8.99 percent, followed by T. Rowe Price Associates at 7.42 percent, Wellington Management Company at 5.41 percent and JP Morgan Asset Management at 5.24 percent.

A regulatory filing Harman filed this week showed it had received an all-stock offer from an unnamed company in December 2015 worth $115 a share at the time.

BY SEO JI-EUN [seo.jieun@joongang.co.kr]