(Refiles to fix typo in last par, should say 70 trillion not
* Samsung says conducting review for optimal corporate
* Firm stresses it is "absolutely neutral" in its
* Holding firm shift seen as next succession move
* Firm also boosting 2016 dividend, to buy back more shares
By Se Young Lee
SEOUL, Nov 29 Tech giant Samsung Electronics Co
Ltd said on Tuesday it will consider whether to
transition to a holding company structure, a move long expected
as the next succession step for the founding Lee family's heirs.
The world's top maker of smartphones, memory chips and
televisions said it was "absolutely neutral" about whether to
proceed with what would amount to an unprecedented overhaul of
the crown jewel in South Korea's biggest conglomerate.
It said it had hired advisers to help with the planning for
a move analysts and investors have long seen as a logical step
in the founding Lee family's efforts to achieve stable control
of their vast business empire.
"The review does not indicate the management or the board's
intention one way or another," the company said in a statement,
adding it would take at least six months.
The move comes after U.S. activist hedge fund Elliott
Management in October called for the firm to split itself into a
holding vehicle for ownership purposes and an operating company,
in order to boost shareholder returns.
Investors have said that Samsung shares trade at steep
valuations discounts to its global peers due to complex
ownership structure, poor corporate governance and inefficient
Samsung did not directly address the fund's proposals on
Tuesday but previously said it would give them careful
consideration and respond by the end of November.
Investors and analysts have long viewed such a split as a
way for Lee family scion Jay Y. Lee and his two sisters to boost
their control of South Korea's top conglomerate, the Samsung
While Samsung executives did not comment on potential deal
structures, investors believe the Lees and Samsung Group
affiliates will exchange their operating company shares for
stock in the holding firm, strengthening their grip.
Samsung Electronics would then return more capital to
shareholders, investors say. Such a move would boost earnings
for Samsung Group firms and the Lee heirs, who face a
multi-billion dollar inheritance tax in the event that
74-year-old Samsung Group patriarch Lee Kun-hee passes away. The
senior Lee has been in hospital since May 2014 after suffering a
"I don't think Samsung said much that was surprising or
beyond what investors had already had in mind," said HDC Asset
Management fund manager Park Jung-hoon.
"I think they just said enough to meet market expectations,
and a lot of that was priced in already so it's a good thing the
stock is not falling today."
In another nod to investors, Samsung said it would pay out
50 percent of its free cash flow to shareholders for 2016 and
2017 and 28,500 won ($24.36) per share in total dividends for
2016, up 36 percent from 2015.
It plans to buy back and cancel additional shares in January
2017 with whatever excess free cash remains from 2016.
The firm also said it needed to maintain a net cash position
of between 65 trillion won and 70 trillion won, suggesting it is
not likely to pay the 30 trillion won special dividend sought by
($1 = 1,169.8400 won)
(Reporting by Se Young Lee; Editing by Stephen Coates)