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'Samsung Electronics’ share cancellation to tighten Samsung C&T’s grip'

Samsung C&T, the de facto holding company of Samsung Group, is expected to tighten its grip on Samsung Electronics after the handset maker finishes canceling treasury shares, raising the stock price forecast of the parent company.

Oh Jin-won, an analyst at Hana Financial Investment, raised Tuesday the stock price projection of Samsung C&T from 150,000 ($133.40) won to 170,000 won, reflecting “the (anticipated) increase in (Samsung Electronics’) share value and the following Samsung C&T’s intensified grip (on Samsung Electronics).”

Oh in the Tuesday report expected Samsung C&T to hold 4.9 percent of Samsung Electronics shares after completing the share cancellation, from 4.3 percent, when South Korea’s market behemoth rolled out a cancellation plan on April 27, without additional buying. 

(Herald DB)
(Herald DB)
Samsung Electronics will cancel half of the treasury shares worth 49.3 trillion won, as a board of directors on April 27 were in favor of the plan in order to raise value for shareholders. The other half will be canceled after the 2018 session of the board of directors’ approval.

Moreover, Samsung Life Insurance, of which Samsung C&T is the second-largest shareholder, is expected to have 8.7 percent when the cancellation is finished, from 7.6 percent as of a March 31 regulatory filing.

“Samsung C&T will exert strengthened clout over Samsung Electronics both directly and indirectly,” Oh wrote.

Samsung C&T remained flat from Monday to close at 137,500 won Tuesday, up 12.2 percent from April 27’s closing at 122,500 won.

By Son Ji-hyoung (consnow@heraldcorp.com)
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