LG Chem shares surge 12% after Palliser calls for new board, stock buybacks
Shares of LG Chem soared 12% on Tuesday after UK-based activist investor Palliser Capital urged the South Korean conglomerate to revamp its board of directors and launch share buybacks, arguing the company is deeply undervalued.
Palliser’s founder and Chief Investment Officer James Smith said LG Chem’s stock could double in value if the company strengthens corporate governance and improves capital allocation. He made the remarks at the 13D Monitor Active Passive Investment Summit in New York, News.Az reports, citing Reuters.
Smith noted that LG Chem trades at a 74% discount to its net asset value, with investors focusing too heavily on its petrochemicals division while overlooking its fast-growing battery business.
“This thing is crazy, crazy, crazy cheap,” Smith said, describing the company as one of Asia’s most undervalued firms.
Palliser, which holds a long-term stake exceeding 1%, emphasized that LG Chem’s ownership of 82% of LG Energy Solution—a major battery supplier for Tesla and Toyota—represents significant untapped value.
Smith criticized the company’s lack of shareholder alignment and corporate transparency, calling on the board to formally evaluate the LG Chem Value Enhancement Plan and help realize President Lee Jae Myung’s “KOSPI 5,000” vision for South Korea’s benchmark index.
Under its corporate value enhancement plan announced in late 2024, LG Chem said it would consider raising its dividend payout ratio once new investments, particularly in batteries and advanced materials, begin to yield profits.
The South Korean president has been urging listed firms to improve governance and shareholder returns, aiming to lift the KOSPI index from around 3,800 to 5,000 within five years.
Palliser has previously targeted other South Korean conglomerates, including SK Hynix, where it successfully pushed for structural reforms. Smith’s former firm, Elliott Management, also led high-profile campaigns involving Samsung Electronics and Hyundai Motor.
While Smith praised LG Chem’s recent asset sales—such as its polarizer and water filter businesses—he said the company must go further by adding industry experts in EVs, advanced materials, and life sciences to its board and initiating share buybacks to unlock long-term value.
LG Chem declined to comment on Palliser’s proposals.
Similar news
