Seoul: Locked in a battle with an activist U.S. hedge fund, the Samsung Group`s de facto holding company sought to win support for a proposed USD 8 billion merger with a sister firm by pledging measures to bolster post-deal shareholder returns.
Cheil Industries said in a statement on Tuesday that the company formed on completion of its all-stock takeover of Samsung C&T Corp would gradually increase its dividend payout ratio to 30 percent by 2020 and also consider share buybacks.
On a forecast 2020 pre-tax profit of 4 trillion won, the dividends would amount to 4,800 won (USD 4.29) per share, Cheil said.
It also promised a governance committee within the board of directors to guard investor interests.
The announcement came as Samsung Group seeks to fend off a challenge from Samsung C&T shareholder Elliott, a hedge fund that opposes the merger and has filed two injunction requests with a South Korean court to block it.
The court may issue rulings on both requests on Wednesday.
The deal is seen as critical to the leadership transfer process for Samsung Group`s founding Lee family. The merged entity would consolidate stakes in key companies including Samsung Electronics Co Ltd into a vehicle firmly controlled by the Lee heirs, helping cement the succession process.
In a rare case of shareholder activism in a country that has long been wary of foreign investors, Elliott has repeatedly criticised the deal as unfair to Samsung C&T shareholders and called on investors to vote against Cheil`s offer.
Investors in Samsung C&T such as overseas fund firms Aberdeen Asset Management and APG Asset Management and South Korea`s Ilsung Pharmaceutical Co have also spoken out against the deal, while some domestic investors have voiced their support.
Samsung C&T shareholders are scheduled to vote on the merger on July 17.