Palliser Capital Urges LG Chem to Reform, Shares Surge 14.3%

UPDATE: Palliser Capital has just announced that LG Chem Ltd. is trading at an astonishing 74% discount to its net asset value, the largest among South Korean conglomerates. This revelation has sent LG Chem’s shares soaring to their highest level in over a year, climbing as much as 14.3% to reach 395,500 won during intraday trading.

This surge comes after Palliser, a London-based activist fund and one of LG Chem’s top shareholders, called for major reforms at the company. They insist that addressing the current undervaluation could unlock over 100% upside on LG Chem’s stock price. “We see a seismic opportunity for LG Chem to adopt bold initiatives that embody the ‘LG Way’ philosophy,” said James Smith, Palliser’s founder and chief investment officer, during a presentation at the 13D Monitor’s 2025 Active-Passive Investor Summit in New York.

In a move to capitalize on LG Chem’s current situation, Palliser is urging the majority shareholder of LG Energy Solution Ltd. to implement significant changes, including a reform of the board of directors and a share buyback program using its stake in the electric vehicle battery maker.

Following Palliser’s remarks, LG Chem’s stock closed up 13.01% at 391,000 won, significantly outperforming the broader Kospi index, which finished the day up 1.56% at 3,883.63.

Palliser outlined four key steps aimed at enhancing LG Chem’s value, including an overhaul of its management and a return-oriented capital allocation strategy. A particularly innovative proposal involves a share buyback-in-kind, where LG Chem would repurchase its shares by distributing LG Energy shares instead of cash. This strategy could have a profound impact on shareholder value.

Moreover, LG Chem recently reported a loss of 68.5 billion won ($48 million) in the first half of this year, a stark contrast to an operating profit of 193.6 billion won during the same period last year. This financial downturn has heightened the urgency for Palliser’s recommendations, which follow LG Chem’s announcement on October 1 regarding a 2 trillion won capital raise to support its restructuring efforts.

Palliser’s suggestions also include implementing a long-term discount management program, resonating with South Korea’s broader corporate reforms, particularly the government’s vision to elevate the Kospi index to 5,000 points—a historic first that could reshape the national economy.

As LG Chem continues to navigate these critical developments, it remains positioned to benefit from the booming electric vehicle market through its stake in LG Energy Solution, which has emerged as a leading supplier in the United States. The significance of these changes cannot be overstated, as they not only aim to enhance shareholder value but also align with South Korea’s economic aspirations.

Investors and market watchers are urged to stay tuned for further updates as LG Chem and Palliser Capital work towards unlocking the full potential of this undervalued stock.