Elliott Management, an activist U.S. hedge fund, has reportedly sold off its entire stakes in Hyundai Motor Group companies as its attempt to challenge the group’s controlling family over its corporate governance failed.
Elliott announced in April 2018 that it had acquired US$1 billion worth of stakes in Hyundai Motor Group’s three key affiliates – Hyundai Motor, Kia Motors and Hyundai Mobis. Then, it began to interfere in the management of the automotive group. It blocked the group’s governance reform plan and demanded a dividend payout of 8.3 trillion won (about US$7.16 billion).
Elliott declared a proxy war at the general shareholders’ meetings of Hyundai Motor and Hyundai Mobis in March 2019, but it failed to secure control of the two companies.
With Elliott out, Hyundai Motor Group is expected to resume its efforts to reform its governance structure. Industry watchers say that it will come up with a new plan that is not much different from the one unveiled in 2018. However, details such as a merger ratio between Hyundai Mobis and Hyundai Glovis are likely to be adjusted. At the time, Institutional Shareholder Services (ISS), a proxy advisory firm, advised investors to oppose the merger, claiming that the merger conditions were unfavorable to Hyundai Mobis shareholders due to an insufficient valuation of the auto parts producer.