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Activist hedge fund Elliott sells stakes in Hyundai Motor companies: paper

By Joyce Lee
Employees of Hyundai Motor Group leave after the company's new year ceremony in Seoul

By Joyce Lee

SEOUL (Reuters) - Elliott Management sold all its shares in Hyundai Motor Group companies last year after it was thwarted in its campaign for huge special dividends and board seats, South Korean media reported.

The U.S. activist hedge fund was not among the December 2019 year-end list of shareholders at any of the Hyundai companies it targeted, the Korea Economic Daily reported, citing an unidentified investment banking source.

A Seoul-based representative for the fund declined to comment. Hyundai Motor also declined to comment.

Elliott held more than $1 billion worth of shares in Hyundai Motor <005380.KS>, Kia Motors <000270.KS> and Hyundai Mobis <012330.KS>, an Elliott unit said in April 2018.

Its efforts to shake up the family-run conglomerate had some success when a 2018 Hyundai-backed shareholder vote on a restructuring proposal, seen aimed at aiding the handing of the group's reins to heir apparent Euisun Chung, was canceled.

But in March 2019, the companies' shareholders rejected Elliott's demands for 7 trillion won ($6.2 billion) in one-off dividend payments and seats on the boards of Hyundai Motor and Hyundai Mobis.

"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," said Lee Han-joon, analyst at KTB Investment & Securities.

"I'm sure they will breathe a little easier as Elliott leaves.. they will have more room to utilize capital," Lee said.

A recent recovery in the share prices of the Hyundai firms may have influenced the move, the newspaper said, citing the source.


(Reporting by Joyce Lee; Editing by Edwina Gibbs)