By Kwanwoo Jun
LG Chem's shares are sharply higher after U.K.-based activist fund Palliser Capital called for changes at what it sees as a severely undervalued company.
The South Korean chemical company's stock rose as much as 14% to 395,500 won, in early trading Wednesday, following Palliser's call at the 13D Monitor Active Passive Investment Summit in New York overnight. By comparison, the benchmark Kospi was less than 1% higher.
Palliser said late Tuesday that LG Chem is trading at a 74% discount to its estimated net asset value, resulting in a value gap of 69 trillion won, equivalent to around $48 billion.
LG Chem currently seems valued as a bottom-of-the-cycle petrochemical company with little credit for its 79% stake in its battery-making subsidiary LG Energy Solution, the third most valuable firm among listed South Korean companies, Palliser said.
The U.K. investment fund, which identified itself as one of the top 10 investors with a long-term stake of over 1% in LG Chem, urged the company to shake up its board and buy back shares to help enhance its valuation and improve shareholder returns.
Earlier this month, LG Chem said it would raise around 2 trillion won by selling 4.16% stake in its battery subsidiary. It said it would sell 5.8 million LG Energy Solution shares in a price return swap deal in November and use the proceeds to improve its financial structure.
LG Chem said its stake in LG Energy Solution would fall to 79.38% after the sale.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
10-21-25 2350ET
