Samsung Elec mulls holding company move, boosts payout

The logo of Samsung Electronics is seen at its headquarters in Seoul South Korea

The announcement comes after Elliott Management Corp. asked Samsung last month to improve Samsung's corporate governance and to simplify its complicated ownership structure.

Samsung also promised to strengthen corporate governance procedures in its board. The company says this doesn't mean that there will be a split, just that it is considering one.

Samsung will also boost shareholder returns for the year, increasing dividends for 2016 by 30% to 4 trillion won ($3.4 billion), that should boost dividends per share by 28,500 won ($24). "We remain absolutely neutral at this point and will make a decision only after the review is complete". "This includes the possibility of creating a holding company structure and the potential benefits and feasibility of listing the Company's shares on additional global exchanges", the company writes in the statement.

To that end, external advisors have been brought in, to look at the various legal, financial, operational, and other factors that would be involved.

The company has been under pressure from some investors to break itself into a holding unit and an operating company to boost shareholder value. Samsung has hired some advisers for assisting it in this move.

There is no word from Samsung executives regarding the deal structures resulting from this upcoming overhaul.

If Elliott's proposal is accepted by the board, it will see Samsung divided under two separate holding companies with one focusing on ownership and the other on operations.

"I am doubtful whether the listing on a US exchange would really work in a situation where the Korean stock index is not included in MSCI's developed market index", Lee said. But it's a far more conciliatory tone compared to Samsung's public brawl with Paul Singer's hedge fund in 2015, when the controlling Lee family narrowly succeeded in pushing through the merger of two Samsung affiliates.

In another nod to investors, Samsung said it would raise dividends for this year by 36 per cent to 28,500 won per share, and buy back and cancel additional shares next January with whatever excess free cash remains from 2016.

Tech giant Samsung Electronics Co Ltd 005930.KS said on Tuesday it will consider whether to transition to a holding company structure, a move long expected as the next succession step for the founding Lee family's heirs.

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