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Report: Elliott resumes push for reforms in Hyundai


According to Market Intelligence, December 2022


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Report: Elliott resumes push for reforms in Hyundai

A letter to Hyundai Motor Group, the parent company of Hyundai Motor Co., suggests hedge fund company Elliott Management Corp. may be resuming its campaign for reforms at the South Korean car company, Bloomberg News reported Sept. 6.

In the letter dated Aug. 14, Elliott Management — owned by billionaire Paul Singer — invited Hyundai to discuss its proposed merger of some key divisions to boost shareholder value and refine the group's framework. An option is for auto parts maker Hyundai Mobis Co. to sell its after-sale business to Hyundai Motor Co., and what remains of Mobis could be merged with logistics affiliate Hyundai Glovis Co. The proposed merger would position the combined Mobis-Glovis entity on top of the group's hierarchy and would offer it a controlling stake in Hyundai Motor Co.

Elliott added that the proposed changes would also enable Hyundai to "sever circular shareholdings, address concerns surrounding transactions between affiliates and maximize efficiency from a corporate governance perspective."

Sources familiar with the matter said Hyundai subsequently declined Elliott's invitation to discuss the proposed changes due to possible local law infringements.

Elliott expressed its frustration over process delays on Hyundai's side. Elliott also suggested that Hyundai establish a committee to create a restructuring scheme that would benefit both the group and its stakeholders.

Hyundai said in a statement that it hopes to share its thoughts "on how to improve shareholder value with all of our shareholders in due course."