Report: Harman Wants More Than $8 Billion From Samsung

Samsung Logo 2016 AH 16

A little over a month ago, Samsung announced its intentions to acquire Harman International Industries, a Stamford-based manufacturer of connected car systems. Now, while Harman’s board of directors unanimously approved this deal and both companies announced how they’re hoping to officially complete the transaction by mid-2017, Samsung’s acquisition may not go as smoothly as planned. Namely, as The Wall Street Journal reports, some of Harman’s shareholders aren’t satisfied with the $8 billion Samsung reportedly offered to Harman and will vote against the deal unless the Seoul-based conglomerate is willing to offer more.

Alexander Roepers, the founder of Atlantic Investment Management, reportedly said how Harman is worth a lot more than what Samsung is offering. Now, this investment firm from New York only holds a 2.3% stake in the Stamford-based car parts maker which obviously isn’t enough to stop the transaction from going through, but Roepers’ statement may be the start of a larger movement among Harman’s shareholders looking to force Samsung into sweetening the deal. Industry sources are claiming that Harman was already on the verge of being acquired by an unnamed party back in late 2015. That rumored all-stock deal was worth approximately $115 per share, which is a bit more than what Samsung is currently offering, but it’s certainly enough to convince Harman’s shareholders that their assets are worth more than what the Seoul-based tech giant is looking to pay for the company. Of course, the two situations aren’t directly comparable seeing as how Samsung is currently offering $112 per share in cash, but that might not be relevant seeing how stock values are based on investors’ expectations which don’t always coincide with reality.

Finally, despite the fact that Samsung and Harman agreed to a no-shop provision when negotiating the sale, The Wall Street Journal speculates how it’s possible that Harman’s investors are looking to hold out for a bid from another tech giant. Of course, Harman’s other potential suitors would have to be immensely rich seeing how they’d have to pay $240 million in penalties to Samsung in case they acquire the Stamford-based company. In other words, even if Harman’s shareholders reject Samsung’s initial bid next year, the Seoul-based conglomerate still has the best chance of acquiring this manufacturer of connected car systems.