Hyundai rejects Elliott's payout call, shares rise ahead of showdown meeting
By Hyunjoo Jin SEOUL (Reuters) - Hyundai Motor Group on Tuesday rejected demands by U.S.
By Hyunjoo Jin
SEOUL (Reuters) - Hyundai Motor Group on Tuesday rejected demands by U.S. activist investor Elliott Management for a combined 7 trillion won ($6.3 billion) dividend payout and new board members, complicating efforts to revamp South Korea's second-biggest conglomerate.
Opposition from Elliott led Hyundai to drop an attempt to overhaul its ownership structure last year, and Executive Vice-Chairman Euisun Chung pledged in January to complete a restructuring expected to pave the way for him to succeed his father Mong-Koo Chung as group chairman.
Elliott, which was not immediately available for comment, had proposed a 2018 dividend of 4.5 trillion won for Hyundai Motor and 2.5 trillion won for auto parts supplier Hyundai Mobis, according to regulatory filings and sources.
This is well over the companies' proposed payouts of nearly 1 trillion won.
Hyundai Motor and Hyundai Mobis will hold separate annual shareholders' meetings on March 22, when shareholders have a chance to vote on the respective proposals made by the companies and Elliott.
Hyundai Motor and Hyundai Mobis shares gained more than 4 percent on Wednesday as investors licked their lips at the prospect of higher returns and a favourable restructuring plan due to Elliott's pressure.
"We expect a vote showdown at the upcoming meeting, which will create a favourable environment for minority shareholders," Chung Yong-jin, an analyst at Shinhan Investment and Securities said.
Hyundai Motor Group is expected to come up with a revised restructuring plan, which is expected to be put to a vote at an extraordinary shareholders' meeting in April or May, experts said.
"Elliott's purpose is to eventually rally support from other shareholders for a vote on a restructuring plan," Park Ju-gun, head of corporate analysis firm CEO Score, said.
Hyundai Motor said in a regulatory filing that the dividend proposed by Elliott would lead to a "massive cash outflow," hurting future investments and shareholder value.
Hyundai Mobis also said it would "undermine its future competitiveness" as it needs to invest more than 4 trillion won to develop new vehicles over the next three years.
Instead Hyundai Mobis announced a 2.6 trillion won shareholder return package over the next three years, less than Elliott's demand for at least 4 trillion won.
The Hyundai Mobis package includes dividends worth 1.1 trillion won, a buyback of stock worth 1 trillion won and a cancellation of 460 billion won worth of shares.
It 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 Motor said it will also add foreigners as outside board directors, while appointing president Albert Biermann, a former BMW executive, as a new board member.
Hyundai Mobis and Hyundai Motor also announced plans on Tuesday to appoint Euisun Chung as co-CEO. Mong-Koo Chung will remain as co-CEO of the two companies.
(Reporting by Hyunjoo Jin; Additional reporting by Heekyong Yang; Editing by David Evans and Stephen Coates)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.
By Jessica Resnick-Ault NEW YORK (Reuters) - Oil prices strengthened on Wednesday, as OPEC and its allies were seen complying with a pact to cut oil supply in September, even as concerns loomed that recovery in fuel demand will be stalled by soaring global coronavirus cases. Early in the day crude was boosted by a bullish stock market. Even as equities whipsawed on pandemic worries, oil stayed higher, buoyed by expectations that OPEC could staunch a supply glut
By Tina Bellon and C Nivedita (Reuters) - Tesla Inc will further cut the price of its Model S "Long Range" sedan in the United States to $69,420, the electric carmaker's chief executive, Elon Musk, announced in a tweet https://bit.ly/2H0JCP0 on Wednesday. The anticipated drop marks the second time this week Tesla has cut the price for the high-end sedan, following a 4% cut of the Model S's price in the United States on Tuesday to $71,990.
By Jeff Mason DES MOINES, Iowa (Reuters) - Under siege over his handling of the novel coronavirus pandemic, President Donald Trump on Wednesday cited what he said was his son's mild bout of the virus as a reason why American schools should reopen as soon as possible. Trump made the comment about his son, Barron, as the president swept into Iowa on a mission to shore up support in battleground states that he won in 2016 but is in danger of losing to Democrat Joe Biden barely three weeks before the election. First lady Melania Trump announced in a statement earlier in the day that the virus that struck both her and her husband had also infected their 14-year-old son