Announces That Majority of Independent Shareholders Sent a Clear Message to Samsung C&T by Supporting Higher Shareholder Returns
Highlights the Opportunity Samsung C&T Has to Be a Market Leader in South Korea by Supporting Local Regulators' Stated Goals of Improving Capital Allocation and Governance to Enhance Corporate Valuation
Notes CLIM and Whitebox Intend to Remain Long-Term Shareholders of Samsung C&T and Hope to Work with the Board to Address the Company's Steep Discount to Its Net Asset Value
City of London Investment Management Company Limited ("CLIM"), Whitebox Advisors LLC ("Whitebox") and other long-term shareholders (collectively with the affiliates of Whitebox, the "Investor Group") are significant shareholders in Samsung C&T Corporation (KRX: 028260) ("Samsung C&T" or the "Company"), with collective ownership in excess of 1% of the Company's common shares. Today, CLIM and Whitebox commented on the outcome of the Company's March 15, 2024, Annual Meeting of Shareholders (the "Annual Meeting"), where the Investor Group submitted shareholder proposals for (i.) an increased dividend, and (ii.) a share repurchase program. Based on the preliminary results, we estimate that a majority of unaffiliated shareholders supported higher shareholder returns. In fact, excluding the National Pension Service, both of the Investor Group's proposals were backed by unaffiliated shareholders.
CLIM and Whitebox stated:
"We greatly appreciate our fellow shareholders sending a clear and loud message to Samsung C&T at this year's Annual Meeting: improved capital allocation and shareholder returns must be made a priority. We believe the overwhelming support received from a broad base of institutional investors, pension funds and international and South Korean proxy advisory firms makes evident that the Company can no longer be run for the benefit of a select few.1 Instead, Samsung C&T has an opportunity to address its valuation problem by adopting a transparent capital allocation approach that systematically considers returns on different uses of capital to improve shareholder value.
As long-term shareholders, we have engaged with Samsung C&T for years regarding our concerns with its share price performance, corporate governance and capital allocation. The shareholder proposals we submitted this year balanced a fair level of return with future investment needs while aligning Samsung C&T's shareholder distributions with institutional investor expectations and the Company's improved operational performance. Most importantly, our campaign shined a light on the opportunity the Company has to implement shareholder-friendly measures that can begin to close the 'Korea Discount' and bring Samsung C&T in line with global best practices. It has been extremely encouraging to see that local regulators, including the Financial Services Commission, are supportive of these initiatives.2 Policymakers are beginning to recognize the need for South Korean companies to receive a proper valuation in the public markets, and just how essential it is for investors to share a profit from that growth. The tide is clearly changing in South Korea.
CLIM and Whitebox intend to remain long-term holders of Samsung C&T because we believe in its immense potential. The results of this year's Annual Meeting demonstrate that minority shareholder interests can no longer be sidelined. Looking ahead, our Group will seek to work with the Company's Board of Directors to help ensure that Samsung C&T can begin being valued like the true powerhouse it is."
About CLIM
CLIM is a UK headquartered asset management firm, established in 1991. CLIM is a long-term investor in global markets via closed-end funds and other securities using a value-based approach exploiting anomalies between price and intrinsic value. CLIM has a strong focus on corporate governance and regularly engages with portfolio companies to enhance shareholder value.
About Whitebox
Whitebox Advisors LLC is a multi-strategy alternative asset manager that seeks to generate optimal risk-adjusted returns for a diversified base of public institutions, private entities and qualified individuals. Founded in 1999, Whitebox invests across asset classes, geographies, and markets through the hedge fund vehicles and institutional accounts we advise. The firm maintains offices in Minneapolis, Austin, New York, London and Sydney.
1 ISS and Glass Lewis Recommend Samsung C&T Shareholders Vote FOR Both Value-Enhancing Shareholder Proposals (March 1, 2024). Voting rights advisory firm riding the wave of activism: "Samsung C&T should pay more dividends", Seoul Economic Daily (March 10, 2024): "All five major domestic and foreign voting rights advisory firms agreed to the activist fund's request for a cash dividend from Samsung C&T… Regarding the 500 billion won share buyback proposal demanded by the activist fund, three advisory firms, including ISS, were in favor…" |
2 Active Support to be Provided to Promote Voluntary Efforts of Listed Companies in Enhancing Their Value, South Korea The Financial Services Commission (February 26, 2024). |
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Contacts:
Longacre Square Partners
Charlotte Kiaie Bela Kirpalani, +1 646-386-0091
SCTInvestorGroup@longacresquare.com
