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Activist Flashlight offers 45% premium to buy Samsung affiliates’ S-1 stakes
The proposed deal values the 20.6% combined holding at about KRW906.6bn, or roughly $655m, and sets a 23 September deadline for the affiliates to respond.
Activist investor Flashlight Capital Partners has offered to buy the stakes held by five Samsung affiliates in South Korean security-services company S-1 Corp at a 45% premium, according to a Bloomberg report carried by Hedgeweek.
Flashlight proposed paying KRW116,000 per share for the affiliates’ combined 20.6% holding, a transaction valued at about KRW906.6bn, or about $655m. It is asking the companies to respond by 23 September, with S-1 shares initially rising as much as 11% after the news before trading around 3% higher.
The bid is described as a “bear hug,” an unsolicited offer made directly to a company’s board at a substantial premium that increases pressure on directors to consider the proposal. The move is also framed as an early test of South Korea’s strengthened shareholder protections taking effect under the revised Commercial Act, which expanded directors’ fiduciary responsibilities to cover shareholders more generally.
Flashlight said it owns less than 5% of S-1 and argued the affiliates have little strategic justification for continuing to hold the shares. It cited Samsung SDI’s focus on the battery sector, and said Samsung’s financial affiliates face regulatory limits on cross-shareholdings with non-financial businesses, adding that selling the holdings could let the affiliates redeploy capital or return more money to shareholders.