Samsung Electronics Co. said it will “carefully” review suggestions from its shareholder and U.S. activist investor Elliot Management Corp. to restructure and simplify its operation by splitting up into separate holding and business entities and later go public in the United States.

The hedge fund’s affiliates - Blake Capital and Potter Capital - sent a letter to the board of the Korean electronics behemoth on Wednesday making multiple demands including demerger into separate holding and operating company and their listing on the Nasdaq stock market. They claimed that the company’s complex operations ranging from smartphones and memory chips to home appliances weigh down the value of its shares.

“Simply put, the remarkable achievements of Samsung Electronics are not being properly reflected in the market’s valuation of its shares,” they said in the letter.

The U.S. fund also proposed that the new holding company should consider equity merger with Samsung C&T Corp., a construction and trading unit of the group that it waged a proxy battle to prevent its merger with Cheil Industries last year.

It also demanded the electronics giant pay shareholders a special dividend of 30 trillion won ($27 billion) - 245,000 won per share - out of its cash hoard of $70 billion on top of regular dividends and improve governance by seating three outside members on the board.

“Elliot is one of Samsung Electronics’ shareholders, and we will carefully review our shareholder’s suggestions,” the company said.

The New York-based hedge fund owns a 0.62 percent stake in Samsung Electronics.

The proposal made by the activist hedge fund came at a critical time when the world’s largest smartphone maker is still reeling from the multibillion-dollar global recall of its new premium smartphone Galaxy Note 7 over battery issues and preparing a new leadership under Jay Y. Lee, son of bedridden group chairman Lee Kun-hee. The younger Lee will join the board as legitimate managing director next month.

Last year, Elliot started a proxy fight in an attempt to upset Samsung’s merger of is two affiliates, Samsung C&T and Cheil Industries, in which the investment firm narrowly lost.

Shares of Samsung Electronics rose 3.89 percent or 63,000 won to 1,682,000 won as of 13:42 p.m. in Seoul trading Thursday.

By Lee Seung-hoon

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]