Singapore-based activist fund Flashlight Capital Partners (FCP) proposed to acquire 20.6% equity in S-1 held by Samsung Group affiliates.
FCP said on the 27th, "We have conveyed a proposal to the boards of directors of five Samsung affiliates — Samsung SDI, Samsung Life Insurance, Samsung Card, Samsung Securities, and Samsung Fire & Marine Insurance — to acquire all of their S-1 equity." The purchase price is set at 116,000 won per share, amounting to 4.4 trillion won on a 100% equity basis. The five Samsung Group companies hold 7,815,656 shares in S-1 (a 20.6% equity stake), which translates to 906.6 billion won based on FCP's offer price for that stake.
FCP is a Singapore-based investment firm founded in 2020 that pursues an activist investment strategy by investing in domestic corporations and then calling for improvements in governance and enhanced shareholder value.
FCP emphasized that the price of 116,000 won per share is the highest since S-1's listing. FCP noted that it is "45% higher than the recent market capitalization level," adding that it "exceeds the all-time high based on S-1's closing price on July 20, 2016, of 4.37 trillion won (115,000 won per share)."
Earlier, FCP argued that Samsung affiliates have no reason to continue holding S-1 equity. It claimed that synergy between financial affiliates such as Samsung Life Insurance, Samsung Fire & Marine Insurance, Samsung Securities, and Samsung Card and S-1's security business is limited, and emphasized that it would be better to use funds secured by selling S-1 equity for each company's core business investment or shareholder returns.
Among them, Samsung SDI, a lithium battery manufacturer, has 12 trillion won in borrowing fund, far exceeding 1.5 trillion won in cash and cash equivalents, and tens of trillions of won in facility investment are planned going forward. FCP said that despite a rights offering and sales of non-core asset, securing funds remains urgent.
FCP said, "From the standpoint of the five shareholder companies, S-1's share price has fallen more than 30% compared with 10 years ago, and dividends are only around 4% on a market price basis, leaving no strategic or financial rationale for holding it," adding, "Shareholders of each company should no longer bear those losses."
FCP requested a response to the acquisition proposal from the five Samsung affiliates by the 23rd of next month. As FCP is also a shareholder of the five Samsung affiliates that received the proposal, as well as of S-1, it plans to consider additional exercises of shareholder rights depending on how each company's board responds.