US activist hedge fund Elliott Management Corp. and Samsung ended a bitter battle in March this year, when Elliott dropped a lawsuit against Samsung over a merger between two Samsung units.

After six months, the latest jab from Elliott came Thursday, with its two affiliates Blake Capital and Potter Capital demanding changes in Samsung’s corporate governance and more dividends for shareholders.


In May last year, Elliott drove minority shareholders of Samsung to oppose the merger between Samsung C&T and Cheil Industries in May last year. The latter is de-facto holding company of Samsung Group.

At the time, Elliott Associates argued that the purchase price offered by Cheil Industries was too low and would prevent shareholders of Samsung C&T from making a decent return. It sought a court injunction to stop Cheil from acquiring Samsung C&T but the court rejected Elliott’s request. The U.S. activist hedge fund also requested a court injunction against a Samsung shareholders meeting to approve the proposed merger.

In the end, Elliott’s effort to stop the merger failed by a narrow margin, as Samsung won the vote by 3 percent at a shareholders meeting in July last year.

Elliott Management was founded by billionaire investor Paul Elliott Singer with $1.3 million in 1977. Its assets under management exceed $29 billion.

Media describe Elliott as a “vulture fund” that purchases distressed debt at a discount rate and attempts to get a favorable settlement after default or demand the full amount plus interest. Singer reaped $2.28 billion profit this year from distressed Argentine bonds it purchased after the country went into default in 2001.

The hedge fund also seeks to maximize shareholder value by purchasing major stakes in seemingly problematic companies, putting public pressure on management to change strategies or improve corporate governance, and ultimately raising the stock price of the target company.

Elliott’s assets saw a steep rise in the wake of the 2008 financial crisis in the US.

By Kim Yoon-mi (yoonmi@heraldcorp.com)