Samsung may face hostile take-over bid

By Matthew Henry

SEOUL, South Korea: International press reports are suggesting Samsung may be facing a hostile takeover by American billionaire, Carl Icahn, but the Korean electronics manufacturer said any takeover attempt would be blocked.

Samsung shares shot up nearly six per cent on news of the potential takeover on Friday, reaching their highest value in around 15 months.

But the company has said it has appropriate measures in place to defend against a hostile takeover from foreign private equity investors, such as Icahn.

This could involve selling shares to friendly bidders or overhauling the company’s ownership structure to make it less vulnerable.

"I think the possibility of unfriendly takeover bids is low, because a large part of the company’s value lies in its chairman, Lee Kun-hee, and top management," chief investment officer of PCA Investment Trust Management, Yoo Jung-sang, told Reuters.

"But from the perspective of shareholders who are unhappy with the stock’s sharp underperformance, there might be expectations that hostile bidders would buy a portion of the shares and pressure the company to take action, such as share buybacks, to lift its share price."

Samsung reported a five per cent fall in second-quarter revenue to 1.42 trillion won, the drop attributed to falling prices in the computer memory chips market which offset good gains in the flat panel TV market.

According to the Australian Financial Review, the April to June period was the company’s lowest quarterly profit result in four years.

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