Some shareholders of Samsung Electronics have not been happy with the returns from the company, reportedly putting pressure on the tech giant to shake things up in a big way.
Samsung this week said it is considering creating a holding company and is also looking at raising dividends—suggesting it listened very closely to U.S. hedge fund Elliott Management in October, who first put forward the idea of a restructure.
The company was shy on details, however, offering no timeframe. Samsung simply said it will hire external advisers for a lengthy review.
According to Reuters, investors view a split for Samsung as a way for the Lee family to boost control of Samsung, which Jay Y. Lee believes trades at a discount to peers due to a complex structure and inefficient cash management.
Under a restructuring, investors would expect the Lees and affiliates in the Samsung group of companies to exchange their operating company shares for stock in the holding firm, strengthening their grip. Samsung Electronics would then return more capital to shareholders, investors say. Such a move would boost earnings for Samsung Group firms and the Lee heirs, who face a multi-billion dollar inheritance tax in the event that 74-year-old Samsung Group patriarch Lee Kun-hee dies. The senior Lee has been in hospital since May 2014 following a heart attack.
Samsung has faced a tough quarter following multiple recalls and the cancelling of its flagship phone, the Galaxy Note 7.