UPDATE 2-S.Korea seeks poison pill against hostile M&A

* Holds public hearing on law revision

* Imbalance seen between takeover, defence means - ministry

* May hurt share value by reducing M&A premium

* Limited impact on Seoul shares; market up 0.6 pct (Adds analyst comment)

By Kim Yeon-hee

SEOUL, Nov 9 (Reuters) - South Korea is seeking to introduce a poison pill scheme to protect companies from being taken over after foreign funds increased their holdings in domestic stocks.

Two of the country's best-known companies -- Samsung Electronics (005930.KS) and POSCO (005490.KS), the world's No.4 steelmaker -- are, respectively, 47 and 49 percent owned by foreign investors.

Analysts say a move to head off hostile takeovers could hurt minority shareholders by stripping out M&A premiums from stock values.

Business groups, though, have called for a clause in their company statutes to allow an acquisition target to issue new shares to designated shareholders at a pre-set low price, so diluting the ownership value of a hostile bidder.