Carmignac Gestion is backing an activist campaign led by UK-based Palliser Capital aimed at improving governance and unlocking shareholder value at LG Chem, the first time it has publicy-backed an activist investor’s proposals, according to a report by Bloomberg.
The move comes ahead of LG Chem’s annual general meeting on 31 March.
Palliser has urged the company to outline a clearer strategy for monetising its roughly 79% stake in battery maker LG Energy Solution. The hedge fund argues that the conglomerate’s structure and capital allocation have contributed to a persistent valuation discount.
According to Carmignac, LG Chem trades at about a 75% discount to its net asset value and has underperformed peers and the KOSPI Composite Index over the past decade.
The activist investor believes reducing the stake in LG Energy Solution and returning capital to shareholders through buybacks or similar measures could help narrow the discount, potentially bringing it closer to the roughly 50% average seen across Korean conglomerates.
Carmignac said it had previously attempted to engage with LG Chem on governance issues but had been unsuccessful.
