The battle between Elliott Management and Hyundai Motor group is expected to extend well beyond the March shareholders' meetings.

Elliott Management wants Hyundai Motor group to pay out a huge one-off dividend of $6.3 billion and appoint five new directors while Korea’s No. 2 conglomerate is against them.

If a majority of shareholders vote for Elliott at the March 22 shareholders’ meetings, would the US hedge fund be happy with that and divest from Hyundai Motor and its affiliates?

Observers point out that Elliott’s ultimate goal is not the March meeting. It is far more interested in Hyundai’s corporate restructuring plan.

On March 22, the chances are that Hyundai will win out. Elliott will not get 50 percent of the votes. Both Hyundai and Elliott know that,” said a source familiar with the issue.

But Elliott does not care because its ultimate goal is not the March meeting. It is seeking to take issue with Hyundai’s restructuring plan, which will complete a father-to-son power transfer within the owner family.”

Elliott, which is headed by billionaire investor Paul Singer, has been against Hyundai Motor group’s efforts at corporate restructuring, claiming it is against shareholders’ interests.

Last year, Hyundai tried to reshape its group-wide ownership structure by breaking up Hyundai Mobis and merging parts of it with its logistics affiliate Hyundai Glovis. Yet, opposition from Elliott and others prompted the group to drop the idea.

After Executive Vice Chairman Chung Eui-sun takes charge of the group this year following the March shareholders’ and subsequent board meetings, Hyundai is expected to renew its efforts for corporate restructuring.

At that point, Elliott is expected to play its trump card once again, according to the source.

To defeat Hyundai in ordinary resolutions is almost impossible. But when it comes to special resolutions, things are different,” the source said.

Even if Elliott is unable to score a victory, it at least can secure big concessions from Hyundai, which would improve its investment returns in Hyundai Motor and its subsidiaries.”

Ordinary resolutions require a simple majority of votes cast by participants. Electing directors or doling out dividends are example agendas of ordinary resolutions.

But overhauling a group’s governance structure, which will involve mergers of units, is subject to special resolutions that must have the approval of two thirds of all shareholders.

Prof. Kim Pil-soo at Daelim University concurs.

The March shareholders’ meeting is not the eventual battle ground. The real war will start thereafter,” he said.

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