U.S. Corporate Raider Gives up on Hyundai
23 January, 2020
U.S. corporate raider Elliot Management has sold off its entire stake in Korean automotive giant Hyundai.
The "activist" hedge fund, whose sole objective is to extract huge dividends and short-term profits for investors, put US$1 billion into Hyundai Motor and affiliates in April 2018.
Financial industry insiders on Wednesday said Elliot sold off its entire 2.9 percent stake in Hyundai Motor, 2.6 percent stake in Hyundai Mobis and 2.1 percent stake in Kia late last year.
Armed with those stakes, Elliot tried to block Hyundai's governance structure reforms while demanding a merger of Hyundai Motor and Mobis and W8.3 trillion in dividends (US$1=W1,165).
But Hyundai succeeded in a counteroffensive at shareholders' meetings last year. Elliot was pushing for the appointment of outside directors who backed its proposals as well as its dividend demands during Hyundai Motor and Mobis shareholders' meetings in March last year but was voted down.
Instead, Hyundai's proposal to appoint its own choice of outside directors, investment plans in future mobility vehicles and shareholder return policies won the day. Elliot seems to have concluded that there was no big money to be made and liquidated its holdings when the stock prices edged up late last year.
An industry source said, "Elliot thrives by taking advantage of a company's weaknesses and demanding ultra-high dividends but seems to have exited Hyundai after breaking even."
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