[AJu News DB]
Samsung SDS, a Samsung Group unit, vowed Tuesday to push ahead with the spinoff of its logistics business, rejecting a request from small stockholders to buy back shares or pay interim dividends.
The proposed spinoff is part of rigorous corporate restructuring pushed by the country's largest family-run conglomerate to put Samsung Electronics vice chairman J. Y. Lee onto the center stage.
Samsung Electronics holds 22.6 percent of Samsung SDS, and Samsung C&T controls 17.1 percent. Jay Y. Lee is the third-largest shareholder with a 9.2 percent stake.
Samsung SDS shares tumbled after the company said it would consider a spinoff of its logistics business, sparking market speculation about a possible merger with Samsung C&T Corp., the group's trade arm and de facto holding company. Minority shareholders have opposed the spinoff, urging Samsung SDS to buy back shares or pay interim dividends.
In a regulatory filing Tuesday, Samsung SDS rejected the request from small shareholders, saying it needs quick steps to expand its external market for sustainable growth.
"There have been recommendations from experts that it's desirable to spend cash on boosting corporate value such as mergers and acquisitions after a spinoff instead of buying back shares or paying dividends," it said.
In September last year, the group completed a merger of Cheil Industries and Samsung C&T, with the merged entity keeping the name of Samsung C&T. The deal helped the founding Lee family cement control by allowing the group to strengthen its cross-ownership structure since the merged affiliates had stakes in other companies.
The merger was aimed at paving the way for the transfer of ownership from the group's ailing head Lee Kun-hee to his only son who has struggled to streamline the group's portfolio since his father was hospitalized in May 2014.
The group has struggled to cut costs and sell non-core units in an effort to raise funds for massive inheritance tax.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
