By Bola Kougbe
Samsung Electronics Co Ltd reportedly may consider splitting itself into two as proposed by U.S. activist, hedge fund Elliott Management.
According to reports, the South Korean company has been struggling to maintain its share value following the failure of its Note 7 brand of smart phones.
Also, the hedge fund wants Samsung to divide into a holding vehicle for ownership purposes and an operating company, pay a $26 billion special dividend, pledge to return at least 75 percent of free cash flow to investors and agree to appoint some independent directors.
Report also claims the split would allow the heirs of the company to strengthen their grip on the global smartphone leader, the crown jewel of the Samsung Group business empire.
HI Investment, a Korean asset management organization, said in a report Monday, that “even if the company (Samsung) does not comment on specifics such as the timing of a split … the firm will at least say it will implement ownership structure changes in a reasonable manner”.
Samsung Board of Directors are to meet on Tuesday to consider the proposal by Elliott.