Court rejects bid to block Samsung stock sale

Seoul - A South Korean court on Tuesday rejected a US hedge fund's request to block the sale of treasury stocks by construction firm Samsung C&T, clearing the path for the $8bn merger of two Samsung affiliates.

The planned merger, which would see Cheil Industries acquire Samsung C&T through an all-stock deal, is the latest in a series of moves by Samsung's founding Lee family to boost control over the conglomerate ahead of a generational power transfer.

The US hedge fund, Elliot Associates, which holds a 7.12% stake in Samsung C&T, has opposed the merger, arguing that it "significantly undervalues" the construction firm's stock.

The Seoul Central District court had already dismissed an Elliot demand to prevent a July 17 Samsung shareholders' meeting called to approve the proposed merger.

Tuesday's ruling rejected a second demand to halt Samsung C&T's sale of treasury stocks to a "friendly" shareholder, chemicals maker KCC.

Elliot had argued that the sale was aimed at boosting the pro-merger vote at the shareholders' meeting.

"The request by Elliott has been rejected," a court spokesperson said.