Samsung executives, however, claimed to have no knowledge of such a bid but said they had strategies combat hostile takeover bids.

Samsung Electronics is South Korea''s most valuable company with current market capitalisation of 95.2 trillion won ($103.7 billion). Foreign investors hold 49 per cent of its shares.

Executives of Samsung Electronics acknowledged rumors of foreign hedge funds trying to acquire a large amount of Samsung Electronics stocks and said the company is drawing up protective measures against a takeover bid.

The Samsung group holds a 30.4-per cent stake in the company, including a 3.2 per cent stake owned by chairman Lee Kun-hee and his family. An acquirer would have to secure a stake equivalent to that to get managerial rights in the Korean company. That would require some $33 billion given that Samsung Electronics'' market capitalisation is estimated around W90 trillion.

Samsung Electronics shares shot up more than 6 per cent to their highest in nearly 15 months. Shares were also boosted by after Samsung said it would issue 73 billion won in interim dividends after posting a smaller-than-expected 5 per cent drop in quarterly profit.

Possible defence measures for Samsung include selling shares to friendly investors, the newspaper said.

Analysts saw the report as a sign that foreign investors, who own 49 per cent of the company, may be trying to rig up prices by increasing pressure on top management of the company.