Elliott Management Disposes Entire Stake In Hyundai Motor

Elliott Management Corporation sold all its shares in Hyundai Motor Group HYMTF companies last year, following its failed attempts to boost dividends and gain board seats at the South Korean family-run conglomerate.

The U.S. hedge fund’s name was not found in any of Hyundai Motor companies’ shareholder lists released at the end of 2019, Reuters reported, citing the Korea Economic Daily.

Elliott held shares worth over $1 billion in three unites of Hyundai Motor Group, namely Hyundai Motor, Kia Motors and Hyundai Mobis, said an Elliott unit in April 2018.

Why It Matters

Elliott could successfully thwart Hyundai’s restructuring proposal from 2018.

At the time, Elliott and other shareholders opposed Hyundai’s proposal, saying that the family-run conglomerate’s ownership restructuring plan could favor its family members rather than minority shareholders.

In March 2019, however, Elliott’s call for boosting dividends and appointing new board and audit members was rejected by Hyundai’s shareholders.

“The dividend proposed by the shareholder (Elliott) may sound tempting, but in the long term, it is like a poisoned chalice or nothing but cutting open the belly of a goose with the golden eggs,” said one of Hyundai Motor shareholders, at the time.

Now that Elliott has disposed of all its shares, Hyundai “will have more room to utilize capital,” an analyst at KTB Investment & Securities, Lee Han-joon told Reuters.

“From Hyundai Motor’s perspective, Elliott kept talking about excess capital and asking for dividends, a lot of money. But the company rejected it by insisting it has a lot of investment needs,” he added.