Samsung Electronics jumped 6.4% to 687,000 won ($750), its highest close in more than two years, on a report of a possible hostile takeover bid by Carl Icahn and other hedge funds. South Korea's daily Chosun Ilbo broke the news, but Samsung's executive VP of investor relations told analysts he is unaware of a hostile bid by Icahn, adding that Samsung "has an appropriate set of strategies in place that we'll implement." The Samsung Group owns 30.4% of Samsung Electronics, of which 3.2% is controlled by chairman Lee Kun-hee. Foreign investors are said to own a 49% stake. Samsung Electronics has a market cap of 101.3t won ($110b) based on Friday's close, meaning a hedge fund would need about $33b to achieve at least a 30% stake in order to gain managerial rights. Separately, Samsung reported better-than-expected Q2 earnings Friday, on strength in its LCD business, despite a 5% decline in net income on weakness in chips and mobile phones.
Sources: Chosun Ilbo, Associated Press, Forbes.com, Reuters
Commentary: Samsung Headlines Korea's Top Heavy ETF • iPhone Unpacked • Samsung's 1Q Spending Supports Thesis That Capex Spending Will Slow
Stocks/ETFs to watch: Samsung Electronics is not traded in the U.S., however it is a sizable component of iShares MSCI South Korea Index (NYSEARCA:EWY) [14.7% of assets as of 6/30 per Morningstar] and the closed-end fund Korea Fund Inc. (NYSE:KF) [12% as of 3/31].
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