Elliott demands higher dividends and restructing at Hyundai
Three years ago, Elliot Management’s Paul Singer fought for reform at South Korea’s biggest conglomerate, Samsung, and narrowly lost in a proxy fight
Seoul — Elliott Management, which announced earlier in April that had it bought about $1bn in shares of units of Hyundai Motor Group, stepped up its pressure on the South Korean conglomerate by making demands ranging from higher dividends to restructuring the group under a holding company.
Elliott’s proposals, which include combining Hyundai with Hyundai Mobis and raising dividends to as much as half of net income, have been relayed to the board of Hyundai Motor Group, it said. Group representatives weren’t immediately available to comment.
The demands signal the beginning of what could evolve into a contest pitting one of the world’s most tenacious activist investors against Korea’s second-largest business empire. For Hyundai’s founding family, Elliott founder Paul Singer’s investment comes at a tricky time as the group’s 80-year-old patriarch, Chung Mong-koo, prepares to hand over control of the conglomerate to his son.
Singer’s acquisition of stakes in three group units — those of Hyundai Motor, Kia and Hyundai Mobis — were announced earlier in April, marking his return to Korea. Three years ago, Singer launched a campaign for reforms at the nation’s biggest conglomerate, Samsung, and narrowly lost in a proxy fight, while playing a key role in events that led to the impeachment of the country’s president and the jailing of Samsung’s de-facto leader.