Activist fund Flashlight Capital Partners (FCP) has called on S-1, a Samsung Group affiliate, to enhance shareholder value.
On the 24th, according to the investment banking (IB) industry, FCP recently sent a shareholder letter to the S-1 board urging improvements in shareholder value, normalization of governance, and enhancement of corporate value. FCP pointed to S-1's undervalued share price relative to its business competitiveness and presented five key improvement plans that include the board's countermeasures, a diagnosis of business conditions, and future vision.
FCP holds more than 1% of S-1's outstanding shares. FCP argued that S-1's share price is undervalued compared with its business competitiveness. S-1 is Korea's No. 1 security company, but its share price has fallen 30% over the past 10 years.
It cited governance as the cause of the undervaluation. Over the past 25 years, all of S-1's key executives have come from Samsung Group affiliates, meaning there were no appointees with expertise in the guard and security market, it said.
FCP is an activist fund manager founded in 2020 by Chief Executive Lee Sang-hyun, formerly of global private equity (PEF) managers Affinity Equity Partners and Carlyle Group.
An S-1 official said, "S-1 delivered record results last year and maintained a 60% payout ratio, far exceeding the market average," adding, "We plan to continue communicating with the market while reviewing the best possible options to raise corporate value, taking into balanced consideration the interests of all shareholders."