Samsung Electronics (005930) Executive Chairman Jay Y. Lee will buy about 1.9 trillion won ($1.4 billion) worth of Samsung Electronics shares from his mother, Hong Ra-hee, former honorary director of the Leeum Museum of Art. Hong is selling the stake to repay loans she had used to fund inheritance tax payments, and the transaction appears to have been structured as a deal between major shareholders to minimize the impact on the market.
According to a filing with the Financial Supervisory Service's electronic disclosure system on the 9th, Lee plans to acquire 7,188,793 common shares, or a 0.11% stake, held by Hong through an off-market purchase on the 12th of next month. The acquisition price is 269,500 won per share based on the closing price on the 8th, bringing the total transaction value to 1.9374 trillion won. The amount is an estimate and may change within a range of 70% to 130% of the planned figure.
Once the deal is completed, Lee's stake in Samsung Electronics, combining common and preferred shares, will rise to 1.58% from 1.47%. On a common-share basis, which carries voting rights, his holding will increase to around 1.78% from 1.67% at the end of June. Hong's common-share stake, meanwhile, is expected to fall to about 1.13% from 1.25%. Earlier this year, Lee received Hong's entire holding of Samsung C&T (028260) shares as a gift.
The Samsung Group's controlling family completed payment in April of 12 trillion won in inheritance taxes levied on the estate of late Chairman Lee Kun-hee, paying the amount in installments over five years. While Hong and her two daughters funded the taxes through share sales and stock-backed loans, Jay Y. Lee has relied on dividends from group affiliates and unsecured loans rather than selling shares. Business circles view the choice of a transaction between major shareholders, rather than a block deal on the open market, as a way of minimizing market disruption.
