Hyundai Mobis returning $2.3bn to shareholders, but rejects Elliott proposals


Hyundai Mobis Co Ltd, under pressure from activist investor Elliott Management Corp to address its excess capital and governance structure, announced a smaller-than-sought 2.6 trillion won ($2.3 billion) shareholder return package.

The de facto holding company of South Korea’s top automaker Hyundai Motor rejected a 2.5 trillion won dividend demanded by Elliott and also new board members it recommended, a source familiar with the matter said.

The new package is smaller than Elliott’s demand for at least 4 trillion won of shareholder returns.

The rejections mean a restructuring of Hyundai Motor Group remains uncertain. Vice-chairman Euisun Chung pledged in January to complete a restructuring of South Korea’s second-biggest conglomerate, which is widely expected to pave the way for him to formally succeed his octogenarian father as head of the group.

A previous attempt to overhaul the conglomerate’s ownership structure was shelved due to opposition from the US fund.

Elliott was not immediately available for comment.

The package from Hyundai Mobis includes dividends worth 1.1 trillion won, a buyback of stocks worth 1 trillion won and a cancellation of 460 billion won worth of shares, over the next three years.

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Hyundai Mobis said an unidentified shareholder proposed an annual dividend of 2.5 trillion won, a proposal which it has rejected.

The auto parts supplier also said it will appoint former Opel Chief Executive Karl-Thomas Neumann, and Brian Jones, co-president at Archegos Capital Management, as outside board directors.

Hyundai Mobis and Hyundai Motor also announced plans on Tuesday to appoint Chung as co-CEO. The automaker will also add foreigners as outside board directors, while appointing president Albert Biermann, a former BMW executive, as a new board member.

Group chairman Mong-Koo Chung will remain as co-CEO of Hyundai Mobis and Hyundai Motor.


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