Samsung said it will disclose plans to boost shareholder value on Tuesday — a move that comes amid pressure from U.S. fund Elliott Management to split the company in two and provide more in payouts.
The U.S. activist hedge fund, which owns 0.6 percent of Samsung, called on the South Korean tech giant in October to divide itself into a holding vehicle for ownership purposes and an operating company, as well as pay out $26 billion in a special dividend.
The Seoul Economic Daily, citing an unidentified source, reported on Monday the firm will say it plans to consider a split. Samsung declined to elaborate further on Monday on its plans, although it said last month it is considering buying back more shares.
A split in two has long been a subject of market speculation with analysts noting that such a move could help the Samsung Group founding family heirs to boost their control of the world's top maker of smartphones, memory chips and televisions.
"It's difficult to argue with the logic of Elliott's proposals," said David Smith, head of corporate governance at Aberdeen Asset Management Asia. "A simpler structure is certainly preferable, and yes most would agree they can afford to pay out more.
"What is important is that these changes should benefit all involved, including family, group, and minority shareholders," he said.
Samsung is also keen not to alienate investors at a time when it is reeling from a disastrous withdrawal of the fire-prone Galaxy Note 7 smartphone that the firm projects will cost 6.1 trillion won in profits over three quarters.
Its offices have also been raided by prosecutors as part of a widening political scandal involving a confidante of President Park Geun-hye.
Samsung said it will hold a conference call at 9:30 a.m. local time (0030 GMT) on Tuesday to discuss its plan.
Other measures proposed by Elliott, which unsuccessfully challenged a controversial 2015 merger of two Samsung Group affiliates, includes the return of at least 75 percent of free cash flow to investors and the appointment of some independent directors.