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Samsung Electronics considering split: report

Monday, November 28, 2016 - 01:48

A South Korean media report says the board of the world's largest smartphone maker will consider a proposal to split the company in two. As Tara Joseph reports, shareholders are in favor of the idea, with Samsung struggles to recover from its Note 7 exploding phone crisis, and a leadership succession issue. Tara Joseph reports.

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Troubled and looking for the next step forward. South Korean media on Monday reporting that the world's largest smartphone maker Samsung Electronics is considering split itself in two... A radical corporate makeover lauded by U.S. activist hedge fund Elliott Management. (SOUNDBITE) (English) REUTERS REPORTER TARA JOSEPH, SAYING: Samsung is still reeling from the Note 7 exploding smartphone crisis, that wiped billions of dollars off the value of its stock. But it's also struggling with the issue of family succession in a very traditional family-run South Korean company. Patriarch Lee Kun Hee is 74, and incapacitated by a heart attack. And there are various theories swirling as to how his son and two daughters will ultimately gain control. Not to mention the hefty inheritance tax bill. The Elliott fund, founded by billionaire Paul Singer, suggests splitting Samsung into two sections. A holding vehicle that would allow the Lees to strengthen their grip on the business. And a separate company for day to day operations. It's also pushing for a 26 billion dollar dividend for investors. And the appointment of independent directors. International shareholders are backing the proposal, saying it could unlock the value of a business with a strong South Korean influence... and help the Lees consolidate control. The Lees own around 5 percent of Samsung, while the country's Pension Service holds nearly a tenth of it. Elliott Management - by comparison - has less than a one percent stake. Seoul's Economic Daily says the board will meet on Tuesday to formally respond to Elliotts proposals. A decision that could mark a radical turning point in the company's stock price - and its future.

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Samsung Electronics considering split: report

Monday, November 28, 2016 - 01:48