Samsung Buyback May Target Preferred Shares, Narrowing Korea's 45% Discount

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โดย Bloomberg·KR·Read original
Summary · why it matters

Samsung Electronics Co.'s anticipated equity buyback is raising investor expectations that the Korean giant will purchase non-voting preferred shares, narrowing a steep discount and setting an example for others. More than 100 South Korean companies, including Hyundai Motor Co. and LG Chem Ltd., have issued preferred shares, which trade at an average 45% discount to common stock, according to Sachin Mistry, a portfolio manager at Palliser Capital in London. Last month, Samsung said it will spend up to 110 trillion won ($81.8 billion) on shareholder returns, one of the largest such programs worldwide, and the gap between its preferred and common shares currently stands at 26%, the widest in over a decade. Hyundai Motor also announced a buyback in August that includes preferred shares. Under Korean law, Samsung's financial affiliates cannot hold more than 10% of voting common stock, so a large buyback of common shares could force them to sell, making preferred shares a more attractive target. Investors like Yacktman Asset Management expect such buybacks to narrow the discount and help reduce the broader 'Korea discount' in equity valuations.

Impact on stocks 6

Electrification & Mobility▲ · 3 stocks
Hyundai Motor Co. Ltd.
005380
▲ PositiveCapitalrelevance

Hyundai Motor announced a buyback in August that includes preferred shares, which could narrow the preferred discount.

Artificial Intelligence▲ · 1 stocks
Samsung Electronics Co Ltd
005930
▲ PositiveCapitalrelevance

Samsung's up-to-110-trillion-won shareholder return program and anticipated buyback targeting preferred shares could narrow the 26% preferred-common gap.

Others▲ · 2 stocks
Samsung Electronics Co Ltd
005930
▲ PositiveCapitalrelevance

Samsung's up-to-110-trillion-won shareholder return program and anticipated buyback targeting preferred shares could narrow the 26% preferred-common gap.

Hyundai Motor Co
005380
▲ PositiveCapitalrelevance

Hyundai Motor announced a buyback in August that includes preferred shares, which could narrow the preferred discount.

Off-coverage companies 1

Yacktman Asset ManagementPrivate± Mixed
relevance

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