Activist Fund Offers to Buy Samsung’s S-1 Stake for 906.6 Billion Won

Flashlight Capital Partners (FCP), a prominent domestic activist private equity fund, has made a surprising offer to purchase a majority stake in S-1, a specialized security company, from Samsung Group. The proposed price for the entire 20.6% stake held by five Samsung affiliates—Samsung SDI, Samsung Life Insurance, Samsung Card, Samsung Securities, and Samsung Fire & Marine Insurance—stands at 906.6 billion won (approximately $656.4 million), which is 45% higher than the current market price of S-1.

FCP argues that S-1 is a non-core, low-profit asset and has no connection with Samsung's core business groups, such as semiconductors, biotechnology, AI, and next-generation automotive electronics. They claim that holding S-1 does not make sense from an efficiency perspective at the group level or from a shareholder value enhancement standpoint. S-1's stock price has been stagnant for over a decade, trading below its performance and causing discontent among minority shareholders and financial investors.

FCP's move echoes their successful activism against KT&G in 2022, which led to significant shareholder returns for investors. Currently, FCP's stake in S-1 is estimated to be between 1% and 5%, but their proposal for a mega deal valued at 900 billion won is seen as a strategic maneuver to address the issue of S-1's undervaluation on a broader market scale. Financial experts believe that FCP's ultimate goal is to boost S-1's stock price by breaking its undervaluation phase, rather than making a genuine acquisition.