BERLIN: Though APG owns only 0.3% of C&T, it has influence given it manages more than 432 billion euros ($485 billion) of assets
The manager of the world’s second-largest pension fund is siding with billionaire shareholder activist Paul Elliott Singer in his fight against Samsung Group.
Builder Samsung C&T Corp. burned a bridge with investors when it agreed this week to sell treasury shares to an ally to win support for a $9 billion merger, said Park Yoo-Kyung, a director at APG Groep NV. Though APG owns only 0.3 percent of C&T, it has influence given it manages more than 432 billion euros ($485 billion) of assets.
Treasury stock is “not to be used as ammunition to protect controlling shareholders’ control in the upcoming succession,” Park, director of sustainability and governance at APG’s Asian asset management arm in Hong Kong, said in a interview. “Are they listening to shareholders’ concerns? They burned the bridge.”
Park said APG will vote against the offer from Samsung’s de facto holding company, joining Singer’s Elliott Associates LP in defying the controlling Lee family. The Lees have much riding on the deal as they seek to solidify control over South Korea’s largest conglomerate amid a once-in-a-generation leadership transition.
Close Ally
Samsung C&T said it will sell all its 8.99 million treasury shares, equal to a 5.8 percent stake, to KCC Corp., a construction material maker linked to the Hyundai conglomerate. Treasury shares are useless in a proxy contest since companies can’t vote for themselves.
“KCC is not a good friend, because they have their own corporate governance problem — they’re not returning the cash to shareholders,” Park said. “Getting help from them is not helpful for Samsung’s image.”
Moody’s Investors Service said on Friday KCC’s purchase reinforces its concerns about the company’s “uncertain investment strategy.”
The sale, which unlocks voting rights the Lee family can use to push through the merger, brought an immediate legal challenge from Elliott. The activist investor, which opposes the bid by Cheil Industries Inc. as too low, called the disposal “a desperate and unlawful attempt” by Samsung to strengthen support for the takeover effort.
