Samsung C&T Under Pressure from Activist Investor
Samsung C&T Corporation, a South Korean construction and trading company, is facing pressure from an activist investor to make changes to its corporate structure. The investor, Third Point LLC, is a New York-based hedge fund that has been pushing for changes at the company since it first acquired a stake in the company in October 2020.
Third Point’s Proposal
Third Point has proposed that Samsung C&T spin off its construction business and focus on its trading business. The hedge fund believes that this would create value for shareholders by allowing the company to focus on its core competencies and reduce costs. Third Point has also proposed that the company increase its dividend payout and reduce its debt.
Samsung C&T’s Response
Samsung C&T has responded to Third Point’s proposal by saying that it is open to considering the hedge fund’s suggestions. The company has also said that it is committed to creating value for its shareholders and is open to exploring new opportunities.
Shareholder Support
Third Point’s proposal has been met with support from some of Samsung C&T’s shareholders. The Korea Corporate Governance Improvement (KCGI) fund, which is the second-largest shareholder in the company, has expressed its support for the hedge fund’s proposal. The fund believes that the changes proposed by Third Point would create value for shareholders and improve the company’s long-term prospects.
Samsung C&T’s Financial Performance
Samsung C&T has seen its financial performance decline in recent years. The company’s revenue has declined from $20.3 billion in 2018 to $17.2 billion in 2020. Its operating profit has also declined from $1.2 billion in 2018 to $890 million in 2020.
Outlook
It remains to be seen whether Samsung C&T will accept Third Point’s proposal. The company has said that it is open to considering the hedge fund’s suggestions, but it is unclear if it will ultimately agree to the changes. If the company does agree to the changes, it could lead to improved financial performance and increased shareholder value.