Palliser Capital ("Palliser"), the eighth largest shareholder of Keisei Electric Railway Co., Ltd. (9009 JT) ("Keisei" or the "Company") with a stake of 1.6%, has today submitted a formal proposal to table an advisory resolution focused on capital allocation at Keisei's forthcoming AGM.
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Palliser has engaged extensively with Keisei for nearly three years on the steps needed to resolve the significant gap between Keisei's market price and intrinsic value. Full details of Palliser's presentation on unlocking and catalyzing growth at Keisei for the benefit of all stakeholders are available at link.
The Company's recent buyback and OLC share sale initiatives, whilst a pivotal step in the right strategic direction, fell well short of stakeholders' expectations and are incapable of delivering the fundamental and lasting change needed at Keisei. After exploring various options with the Company in recent weeks, Palliser's formal proposal today seeks a non-binding, advisory shareholder vote at this year's AGM in June calling for the Board to establish and publish, by no later than 31 December 2024, an optimized capital allocation plan to facilitate:
- a growth-oriented investment strategy and balanced return to shareholders, and
- further reductions in the size of the Company's shareholding in The Oriental Land Co., Ltd. ("OLC") in such manner as the Board determines appropriate but with a view to the stake being smaller than 15% by 31 March 2026.
Palliser believes this is the best way to initiate necessary positive change at Keisei-enabling the Company to solicit feedback from its diverse, retail-dominated shareholder base in a full and fair referendum at the AGM on their desire to see management advance measures designed to unlock value and set Keisei on a path towards sustainable long-term growth and prosperity.
The proposed resolution is formulated to be long-term in outlook, non-prescriptive and non-disruptive of other important company business. In addition to providing a platform for shareholders to contribute their perspectives, the vote will also showcase Keisei as a beacon of more open and transparent governance, with a stakeholder engagement exercise that aligns with important Tokyo Stock Exchange and government policy themes.
Palliser's covering letter to the Keisei Board of Directors sets out further details about the background, objectives and benefits of today's proposal. Palliser has requested confirmation from the Board by 6pm JST on 26 April 2024 that the proposed advisory resolution will be tabled at the AGM.
About Palliser Capital
Palliser Capital is a global multi-strategy fund. Our value-oriented investment philosophy is applied to a broad range of opportunities across the capital structure with a focus on situations where positive change and value enhancement can be achieved through thoughtful, constructive and long-term engagement with companies and across a range of different stakeholder groups. Palliser Capital is the eighth largest Keisei shareholder with a stake of 1.6%.
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Contacts:
Media Contact
Prosek Partners
Brian Schaffer Kiki O'Keeffe
Pro-PalliserKER@Prosek.com
