Hyundai set for Elliott showdown as it rejects $6.3 billion payout call

Hyundai Motor Group on Tuesday rejected demands by U.S. activist investor Elliot...

SEOUL - Hyundai Motor Group on Tuesday rejected demands by U.S. activist investor Elliott Management for a combined 7 trillion won dividend payout and new board members, complicating efforts to revamp South Korea’s second-biggest conglomerate.

“I think Elliott expected that its proposals would be rejected by Hyundai. Its purpose is to 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.

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.

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