Samsung Electronics reported a quarterly profit decline of 5 percent on Friday but shares rose to a 15 month high following speculation of a take-over bid from U.S. activist investor Carl Icahn.
In a report released by Chosun Ilbo, South Korea's largest newspaper, an unnamed Samsung executive indicated that Carl Icahn and other hedge funds were planning a hostile take over of the company.
The report stated that Samsung may be able to defend itself if it sold shares to investors friendly to the company.
The Samsung Group holds a 30.4 percent stake in Samsung Electronics, including a 3.2 percent stake owned by chairman Lee Kun-hee and his family. Any hedge fund would need to secure a stake equivalent or greater than that to acquire managerial rights in the Korean company.
The speculation drew attention away from the weak second quarter, sending shares of the company up 41,000 KRW (US$44.7), or 6.35 percent to 687,000 KRW ($749) on the Seoul Stock Exchange.
The world's top memory chip maker reported its worst quarterly profit in four years after steep declines in computer memory chip prices.
It earned a net profit of 1.42 trillion won ($1.55 billion) in the second quarter, down 5 percent from around 1.5 trillion a year ago.