Flashlight Capital Urges Secom to Raise Stake in Korea’s S-1

Activist investor Flashlight Capital Partners has publicly called on five Samsung Group affiliates to sell their combined 20.6% stake in S-1 Corporation through an open auction. This move follows the affiliates' rejection of Flashlight Capital's August 27 offer to acquire the entire holding of 7,815,656 shares at ₩116,000 per share, totaling ₩906.6 billion (approximately $661 million USD, based on current exchange rates). The offer represented a premium of approximately 45% to S-1's closing price on August 26 and exceeded the stock's all-time high.

Samsung SDI, Samsung Life Insurance, Samsung Fire & Marine Insurance, Samsung Card, and Samsung Securities declined Flashlight Capital's proposal, citing insufficient certainty of completion. Flashlight Capital's Founder and Managing Partner, Sanghyun Lee, argued that if certainty is the concern, an open auction is the solution, allowing credible buyers to submit firm offers and enabling each board to choose the option that best serves its own shareholders. He emphasized that the affiliates, as listed companies, have a duty to their own shareholders to maximize value, and turning down a substantial premium without testing the market for a non-core minority stake is difficult to reconcile with those duties.

Flashlight Capital also highlighted that S-1 has historically been treated as a "third-class citizen within Samsung and a landing spot for its retiring executives." The firm has requested inspection and copying of the shareholder registers for the five Samsung entities to facilitate direct communication with investors. Furthermore, Sanghyun Lee urged Jay Y. Lee, Executive Chairman of Samsung Electronics, not to interfere with the consideration of the offer, stressing that the decision belongs to the boards of the five affiliates and their shareholders. The proposed offer price implied a total equity value for S-1 Corporation of approximately ₩4.4 trillion (approximately $3.2 billion USD), underscoring the significant scale of this potential divestment from the Samsung Group.