Life Asset Management is urging Samsung Electronics to repurchase and cancel its preferred shares to address a valuation gap. Currently, these shares trade at a discount of approximately 26% relative to common stock. The fund has requested that the board review this proposal during its meeting in October, with the goal of completing share cancellations by December.
The discount on Samsung preferred shares previously reached 37% before narrowing to the current level. This issue is common among South Korean firms, where preferred shares trade at an average discount of 45% due to limited voting rights and lower liquidity. In August 2026, Samsung announced a shareholder-return initiative valued at up to ₩110 trillion, or approximately $81.8 billion, which extends through 2030.
The buyback strategy is influenced by South Korean ownership regulations. Repurchasing common shares could push the controlling family toward regulatory ceilings regarding voting stock. Preferred shares provide a way to return capital without violating these constraints. Retail investors have responded to the plan by increasing purchases of preferred shares while selling common stock in anticipation of the price gap narrowing.
The proposal from Life Asset Management reflects a growing trend of shareholder activism in South Korea, where investors are increasingly challenging the governance practices of large conglomerates. While the fund seeks an aggressive timeline for the buyback, Samsung's broader return program is scheduled to continue until 2030, suggesting a more gradual implementation strategy.
