Hyundai Motor Group
HMG's Mobis-Glovis spinoff is suboptimal; a true holding-company structure plus KRW 6tn buybacks, a 40-50% payout, and independent boards close peer discounts and deliver 15%+ upside.
Thesis
Elliott, holding over 1.5% of each Hyundai Motor Group affiliate (Mobis, HMC, Kia), argues that HMG's March 2018 restructuring plan — spinning Mobis's module and after-sales parts businesses into Glovis — is suboptimal because it creates an inefficient four-layer structure, undervalues the spun-off business at 8.5x P/E versus 16.4x for residual Mobis, and leaves KRW 1.8 trillion of tax leakage on the table. Mobis, HMC and Kia trade at 51-73% discounts to global peers, reflecting persistent underperformance, overcapitalized balance sheets, weak payouts, and opaque governance. Elliott's 'Accelerate Hyundai Proposals' demand a true holding-company structure (merge Mobis+HMC, then demerge into Holdco/Opco), KRW 6 trillion of capital returns at both HMC and Mobis, a 40-50% payout policy, and three new independent directors per board — generating at least 15% re-rating on the combined HMC-Mobis entity alone.
SCQA
Hyundai Motor Group is a top-tier global automaker — 4th-largest OEM, 8% global market share doubled from 4%, 7% unit CAGR 2001-2017 — organized through opaque circular shareholdings across Mobis, HMC and Kia.
HMG's March 2018 plan spins Mobis's profitable module and after-sales parts businesses into Glovis at a stingy 8.5x P/E, keeps four subsidiary layers, leaks KRW 1.8 trillion in tax, and ignores balance-sheet, payout, and governance failings.
Adopt the Accelerate Hyundai Proposals: merge Mobis+HMC then demerge into Holdco/Opco, return KRW 6 trillion of excess cash at each of HMC and Mobis, commit to a 40-50% payout policy, and add three independent directors per board.
A holding-company structure plus after-sales margin uplift delivers a 15% re-rating on the combined HMC-Mobis alone, closes Mobis's 57% and Kia's 73% EV/EBITDA discounts to peers, and unlocks trapped value across the group.
The three reasons
- 1
HMG's spin-off values Mobis's A/S business at 8.5x P/E vs 16.4x for residual Mobis
- 2
Mobis trades at 57% EV/EBITDA discount and Kia at 73% to global auto peers
- 3
Mobis+HMC merger plus holdco re-rating delivers 15% upside on the combined entity alone
Primary demands
- Recast the HMG Restructuring Plan into a true holding-company structure: merge Mobis + HMC into 'Hyundai Mergeco', then demerge into Hyundai Motor Holdco and Hyundai Motor Opco
- Return up to KRW 6.0 trillion of excess cash at each of Mobis and HMC and cancel all existing and future treasury shares
- Commit to a clear 40-50% of net income payout policy (cash dividends + buybacks) at Mobis, HMC and Kia
- Add three independent directors with international/sector-diverse backgrounds at each board and amend articles of incorporation (cumulative voting, independent M&A review committee, Director Compensation Committee)
- Ensure a transparent process and fair-value realization for Kia's stake in Mobis
KPIs cited
Pattern membership
Precedents cited
- Samsung Electronics Value Enhancement Proposal (Elliott, October 2016)
Composition what's on the 43 slides
Slide gallery ·
Notes
First public Elliott presentation on Hyundai Motor Group — the 'Accelerate Hyundai' campaign (acceleratehyundai.com), companion to a separately filed Letter to the directors of Mobis, HMC and Kia. Tone is unusually collaborative for an Elliott deck: opens by 'welcoming' HMG's own 28-March-2018 restructuring initiative before arguing it is suboptimal, then proposes a 4-step alternative (Merger / Demerger / Tender offer / Optimization). Cites Elliott's 2016 Samsung Electronics Value Enhancement campaign as Korean-market track-record proof point. Page 20 stacks third-party critic quotes (Reuters, FT, Morgan Stanley, JPM, Breakingviews, Mirae, CIMB) that echo Elliott's Glovis-merger critique — functions as a CEO-quote-contradiction surrogate. No named villain: the critique stays institutional/structural and does not attack the Chung founding family by name. Stake disclosed as 'over 1.5%' in each of Mobis/HMC/Kia (recorded as 1.5). Target is a group so target_ticker left null; primary target is Hyundai Mobis (012330.KS). Presentation_date inferred from 20-April-2018 data cutoff in disclaimer and 4/19/2018 chart x-axis; filename month is 'April 2018' with no day. Peer-gap chart sequence on pages 24-29 is a 6-slide TSR/multiples gap spine.