The $8 billion all-cash deal Samsung Electronics (SSNLF) offered last month for Harman International (HAR) effectively placed the South Korean tech giant in automotive world, putting it on par with the likes of Apple, Inc. (AAPL) and Alphabet, Inc. (GOOGL). But Harman investors aren't ready to call shotgun–at least not yet.
According to the Wall Street Journal, Alexander Roepers, a large Harman shareholder, owning some 2.3% of the shares, is balking at the $8 billion offer, arguing the automotive technology company is worth far more. Roepers plans to vote against the deal, the Journal noted. Among his main point of contention is the timing of the deal, which comes on the heels of Harman issuing not only better-than-expected outlook, the company also promised to not to seek out potential bidders.
Samsung's offer values Harman at $112.00 per share, translating to a 28% premium to Harman's most-recent closing price prior to the deal being made public. As to what Roepers means when he states Harman is "worth far more" is unclear, though the shares traded as high as $145 in 2015, or about 25% above current levels.
For Samsung, however, this is a deal it desperately needs. While it would mark the company's largest-ever acquisition, Harman, which Harman supplies with infotainment technology, would give Samsung immediate access to the fast-growing automotive industry -- an area where products like Apple's CarPlay and satellite radio services from Sirius XM (SIRI) are becoming more prevalent.
In that vein, Harman's board, which accepted Samsung's offer, had similar motivation to sell. “The transaction with Samsung was carefully considered and unanimously approved by Harman’s board of directors as the best way to maximize value for all of our shareholders,” the company said in a statement, citing increasing competition.
As for Roepers, he purchased Harman shares this year in the $70-range, according to the Journal, meaning he stands to make anywhere between 60% to a 42% return from Samsung's offer.