An influential investor advisor has urged Samsung C&T shareholders to reject a merger with a sister firm that would pave the way for a generational leadership change at South Korea's biggest family-run conglomerate.
Ahead of what investors expect to be a tightly contested July 17 vote, advisor firm Glass Lewis & Co said in a note dated Wednesday that Cheil Industries' $8 billion all-stock offer was "profoundly unattractive" for C&T investors and "exceedingly advantageous" for Cheil shareholders.
The recommendation bolsters U.S. hedge fund Elliott Associates' position in a rare case of shareholder activism in South Korea. Elliott, which holds 7.1 percent of builder C&T, has mounted legal challenges to the merger and is urging shareholders to vote against it.
"We are pleased to see that independent specialist advisors agree with our position that the proposed merger is without merit," Elliott said in a statement.