Hyundai-beats-Elliott-in-proxy-war
This year's shareholders' meeting of Hyundai Motor takes place in Seoul. Courtesy of Hyundai Motor

Elliott defeated in all agendas

Shareholders of Hyundai Motor and Hyundai Mobis underpinned the two firms’ management in a proxy standoff between Hyundai and U.S. hedge fund Elliott Management.

Elliott has asked the two Seoul-based automotive companies to dole out $6.3 billion in one-off dividends while Hyundai stuck to its initial play of paying less than $1 billion.

Shareholders voted in favor of the two firms’ management, dealing a blow to the New York-headquartered activist fund that is headed by billionaire investor Paul Singer.

With regard to the five outside directors nominated by Elliott, shareholders did not endorse anyone, either.

The defeat of Elliott has been widely expected because major shareholders and advisory companies have sided with the management despite Elliott’s repeated requests for supports.

Two top-tier proxy war advisory companies of International Shareholder Services and Glass Lewis backed the management’s plan for dividends. They endorsed some outside directors of Elliott, though.

Besides, five foreign pension funds disclosed its preference to the reasonable dividend scheme. They are CalPERS, CalsTRS, SBA of Florida, CPPIB and OTPP.

Against this backdrop, observers pointed out that Elliott has already lost its hope of winning at the proxy war.

What’s next move of Elliott?

But the $35 billion activist fund is not likely to bid a farewell to Hyundai.

Despite its setbacks in the shareholders’ meetings, I don’t think that Elliott will sell off all Hyundai shares because then it would suffer losses. As you know, Hyundai shares headed down after Elliott bought them,” a Seoul analyst said.

Despite its setbacks in the shareholders’ meetings, I don’t think that Elliott will sell off all Hyundai shares because then it would suffer losses. As you know, Hyundai shares headed down after Elliott bought them,” a Seoul analyst said.

Elliott is expected to challenge the management once again. Let’s see how it would act down the road.”

Elliott holds a 2.9 percent stake in Hyundai Motor and a 2.6-percent stake in Hyundai Mobis. Last year, the fund said that it funneled about $1 billion to buy the Hyundai shares.

Hyundai Motor is Korea’s No. 1 carmaker, and its affiliate Hyundai Mobis is the country’s foremost auto components supplier.

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