Palliser Capital Boosts LG Chem Shares, Sees 100% Upside Potential

URGENT UPDATE: Palliser Capital has just announced that LG Chem Ltd. is trading at a staggering 74% discount to its net asset value, the most significant gap among South Korean conglomerates. This revelation has propelled LG Chem’s shares to their highest price in over a year, marking a critical turning point for the chemical giant.

In a compelling presentation at the 13D Monitor’s 2025 Active-Passive Investor Summit in New York, Palliser urged LG Chem’s majority shareholder, LG Energy Solution Ltd., to implement substantial changes, including a board overhaul and share buybacks. The call for reform is underscored by Palliser’s position as one of LG Chem’s top ten shareholders, holding over 1% of the company.

Following Palliser’s remarks, LG Chem’s stock surged as much as 14.3% to reach 395,500 won during intraday trading, the highest level since April 2024. The stock closed up 13.01% at 391,000 won, significantly outperforming the Kospi index, which rose 1.56% to 3,883.63.

Palliser’s founder and chief investment officer, James Smith, highlighted the potential for LG Chem to unlock over 100% upside on its current share price by executing bold initiatives aligned with the ‘LG Way’ philosophy. The activist fund estimates a remarkable gap of 69 trillion won ($48 billion) between LG Chem’s market value and its intrinsic value.

In addition to a board overhaul, Palliser proposed a unique share buyback-in-kind strategy, suggesting LG Chem utilize its stake in LG Energy Solution to repurchase shares. This innovative approach could provide immediate capital while enhancing shareholder value.

Despite this positive momentum, LG Chem reported a 68.5 billion won ($48 million) loss in the first half of 2023, a stark contrast to the 193.6 billion won operating profit during the same period last year. The company has been actively raising capital, recently securing 2 trillion won to support its ongoing restructuring efforts as disclosed on October 1.

Palliser Capital’s proposals include launching an open-ended, long-term discount management program, aimed at aligning LG Chem’s strategies with South Korean corporate reforms and the government’s ambitious Kospi 5,000 vision, which seeks to elevate the benchmark stock index to unprecedented heights.

As LG Energy Solution continues to establish itself as a dominant player in the EV battery market, the potential for LG Chem to capitalize on this growth is significant. With a market capitalization of 27.57 trillion won, LG Energy Solution ranks as the third-most valuable company on the Kospi, trailing only Samsung Electronics Co. and SK Hynix Inc..

Palliser Capital is one of the most vocal foreign activist investors targeting South Korea’s family-run business groups, previously influencing changes at firms like SK Square Co. in response to similar calls for enhanced corporate value.

As LG Chem navigates these transformative suggestions, stakeholders and investors alike will be keenly watching how the company adapts to meet these challenges and opportunities.

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