Palliser Capital urges Samsung and Hyundai to reduce preferred share discounts

Palliser Capital, a London-based activist investment fund, has urged Samsung Electronics and Hyundai Motor Group to address the significant valuation discounts on their preferred shares. Speaking at the Sohn San Francisco Investment Conference, Palliser founder and CIO James Smith argued that the gap between preferred and common shares represents over $60 billion in potential value across the South Korean market.

Specifically, Samsung’s preferred shares trade at approximately a 26 percent discount to its common shares. Palliser proposed that Samsung consider issuing American Depositary Receipts (ADRs) at a premium to finance the buyback and cancellation of these preferred shares. This strategy aims to improve capital efficiency and boost earnings per share (EPS).

Hyundai Motor Group was also targeted, with its three preferred share classes trading at an average discount of roughly 48 percent. Palliser called on both companies to establish explicit targets for reducing these discounts as part of their corporate “Value-Up” plans. While Samsung has previously announced a massive shareholder return plan through 2026, the company has not yet committed to the specific ADR issuance strategy suggested by the fund.