FCP Proposes to Acquire Entire S-1 Stake from Samsung Affiliates for 906.6 Billion Won

Proposal to Acquire Entire Stakes Held by Five Samsung Affiliates
Boards Urged to Fulfill Fiduciary Duty to Shareholders

Activist fund Flashlight Capital Partners (FCP) has officially proposed to acquire the entire stake in S-1 held by Samsung Group affiliates.

On August 27, an FCP representative stated, "We have sent a definitive acquisition proposal to the boards of directors of five Samsung affiliates that hold S-1 shares—Samsung SDI, Samsung Life Insurance, Samsung Card, Samsung Securities, and Samsung Fire & Marine Insurance—offering to purchase all of their holdings." The proposal offers to acquire all 7,815,656 shares (20.6%) held by the Samsung affiliates at 116,000 won per share for a total of 906.6 billion won, with a response requested by September 23.

According to FCP, the proposed price of 116,000 won per share (with an enterprise value of 4.4 trillion won) represents a 45% premium over the current market capitalization (3 trillion won). This exceeds the all-time highest closing valuation of 4.37 trillion won (115,000 won per share) recorded on July 20, 2016.

FCP claimed that there is absolutely no financial or strategic reason for the five Samsung affiliates to continue holding S-1 shares. "From the perspective of these five companies, the share price of S-1 has dropped by more than 30% compared to ten years ago, and the dividend yield is only about 4% of the market price. Therefore, there is no compelling strategic or financial rationale to retain the stake," the fund argued. "Their shareholders should not have to continue bearing these losses."

FCP cited the directors' fiduciary duty to shareholders under the amended Commercial Act and urged the boards of the five Samsung affiliates to announce their reasons for supporting or opposing the proposal and to present alternatives transparently. The CEO added, "FCP is a shareholder not only of S-1 but also of the five Samsung Group companies that received our proposal. Depending on how each board responds, we will actively consider exercising the rights bestowed upon shareholders by the Commercial Act."

Previously, on June 23, FCP had requested that the board of S-1 announce a three-year target share price and present a five-year business vision.

This content was produced with the assistance of AI translation services.