Flashlight Capital Partners Pte. Ltd. has called on five Samsung Group affiliates to sell their combined 20.6% stake in S-1 Corporation (KRX: 012750) through an open auction. The activist firm argues that a competitive process is the only way to resolve concerns over deal certainty while maximizing value for shareholders.

The call follows the rejection of Flashlight’s August 27 offer to acquire the entire holding of 7,815,656 shares at KRW116,000 per share, totaling KRW906.6 billion. This bid represented a premium of approximately 45% to S-1’s closing price on August 26 and exceeded the stock’s all-time high. The affiliates, including Samsung SDI, Samsung Life Insurance, Samsung Fire & Marine Insurance, Samsung Card, and Samsung Securities, declined the proposal citing insufficient certainty of completion.

Arguments for a Competitive Process

Sanghyun Lee, Founder and Managing Partner of Flashlight Capital, stated that Samsung’s response was not a refusal but a request for a different structure. "If certainty is the concern, the answer is a competitive process," Lee said. He emphasized that an open auction allows every credible buyer, whether strategic or financial, to submit firm offers, enabling each board to select the option that best serves its own shareholders.

Flashlight Capital highlighted that all five affiliates are listed companies with directors who owe fiduciary duties to their respective shareholders. The firm contended that turning down a substantial premium without testing the market, and subsequently holding a non-core minority stake indefinitely, is difficult to reconcile with those duties.

Historical Context and Criticism

Lee criticized the historical treatment of S-1 within the conglomerate, describing it as a "third-class citizen" and a landing spot for retiring executives. "Korea's leading security company deserves a shareholder that actually wants to own it," he added. Flashlight Capital, founded in 2020 by Lee, has previously led public campaigns at KT&G in 2022 and initiated its campaign at S-1 Corporation in 2026.

What the Numbers Show

The divergence between the rejected price and the stated reason for rejection highlights a governance issue rather than a valuation dispute. The offer of KRW116,000 per share was explicitly above the stock's all-time high and carried a 45% premium to the prior day's close. Since the affiliates cited "deal certainty" rather than price inadequacy as their primary objection, the data suggests that the barrier to sale is procedural or structural, not financial. An open auction would theoretically mitigate this certainty risk by involving multiple credible bidders, aligning with the directors' duty to maximize shareholder value for the listed affiliates.

Flashlight Capital Partners Pte. Ltd. has offered to acquire the entire 20.6% stake held by five Samsung Group affiliates in S-1 Corporation (KRX: 012750) for KRW 906.6 billion, equivalent to KRW 116,000 per share.

The activist investor, led by Managing Partner Sanghyun Lee, submitted the proposal on August 27, arguing that there is no strategic rationale for Samsung’s lithium battery and financial-services affiliates to retain shares in a security company due to the absence of meaningful business synergies.

Shareholder Register Request

To facilitate direct communication with investors, Flashlight Capital has requested inspection and copying of the shareholder registers for the five entities holding the stake:

• Samsung SDI
• Samsung Life
• Samsung Card
• Samsung Securities
• Samsung Fire & Marine

Lee stated that accessing these registers would allow the firm to contact shareholders directly, ensuring they can evaluate the offer and make decisions serving their interests.

Board Independence Appeal

In a separate letter to Jay Y. Lee, Executive Chairman of Samsung Electronics, Sanghyun Lee urged him not to interfere with the consideration of the offer. The request emphasizes that the decision belongs to the boards of the five affiliates and their shareholders, asking for respect for their independent judgment.

What the Numbers Show

The offer price of KRW 116,000 per share applies to the entire 20.6% holding, totaling KRW 906.6 billion. This valuation implies a total equity value for S-1 Corporation of approximately KRW 4.4 trillion based on the offered percentage, highlighting the significant scale of the potential divestment from the Samsung Group ecosystem.

Timeline and Background

The five boards have until September 23 to respond to the August 27 offer. Flashlight Capital was founded by Sanghyun Lee, former Head of Korea at The Carlyle Group, who previously led the acquisition of ADT Caps (later SK Shieldus) and its sale to SK Telecom. The firm also launched an activist campaign at KT&G in 2022.