Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Elliott demands fresh revamp at Hyundai Motor Group

Stock MarketsSep 07, 2018 12:19AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: A car dealer stands in front of the logo of Hyundai Motor at its dealership in Seoul

By Hyunjoo Jin

SEOUL (Reuters) - U.S. activist hedge fund Elliott Management has renewed its pressure on Hyundai Motor Group with a fresh restructuring proposal after forcing the South Korean conglomerate to abandon its own reform plan in May.

Elliott also urged Hyundai to form a committee to review its proposal with other investors and experts, expressing frustration at what it called Hyundai's silence toward its attempts to discuss the new proposals.

The renewed push comes amid growing public scrutiny over families controlling large conglomerates in South Korea following a corruption scandal last year involving the Samsung (KS:005930) Group.

In a rare victory for an activist shareholder in the country, Elliott and other shareholders helped in May to force Hyundai, South Korea's second-largest business group, to scrap its own restructuring plan, which would have prepared the group for a switch of management from father to son.

"We express our frustration as to HMC board's silence toward our consistent attempts... to communicate and advance the restructuring and other projects," Elliott said in a letter sent to Hyundai on August 14. It released the letter to the public on Friday.

It proposed to establish a committee to discuss restructuring, shareholder returns and a board makeup.

Hyundai rejected the proposal for the committee on the basis that it could potentially violate "fair disclosure rules, which prevent us from sharing material confidential information about the company and its businesses to only a subset of our shareholders."

"We hope to share our thoughts on how to improve shareholder value with all of our shareholders in due course," Hyundai said in a statement on Friday.

Under its new proposal, billionaire Paul Singer's fund asked car-parts maker Hyundai Mobis Co (KS:012330) to sell its after-sale service business to Hyundai Motor Co (KS:005380), and then merge what is left of Mobis with logistics affiliate Hyundai Glovis Co (KS:086280).

Then it proposed the merged Mobis-Glovis purchase stakes in Hyundai Motor from the controlling family and affiliate Kia Motors (KS:000270) to tighten its grip over the crown jewel of the group.

The news raised investors' expectations that the stalled restructuring of Hyundai may revive, sending shares in Hyundai Glovis 5.5 percent higher and Hyundai Mobis up 2.4 percent. Shares in Hyundai Motor fell 1 percent.

Hyundai's original plan was to spin off Hyundai Mobis' lucrative after-sales business and merge it with Hyundai Glovis, whose top shareholders are chairman Chung Mong-koo and his only son and heir apparent Chung Eui-sun.

Elliott owns around 3.0 percent of Hyundai Motor, 2.1 percent of Kia Motors and 2.6 percent of Mobis.

Elliott demands fresh revamp at Hyundai Motor Group

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email