Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Keisei Electric Railway Co / Event-Driven

<ul>
<li>Over two decades, <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a> has been the subject of softer and harder activist efforts to have Keisei monetise its stake in affiliate Oriental Land (4661).</li>
<li>The most recent efforts were by Palliser last fall, briefly discussed <a href="https://www.smartkarma.com/insights/keisei-electric-rail-9009-a-buyback-but-it-s-likely-to-be-crossholders-selling-in-tostnet-3" target="_blank" rel="noopener">here</a> two weeks ago when Keisei announced a buyback. </li>
<li>Today, Keisei <a href="https://contents.xj-storage.jp/xcontents/AS01810/961e9d0f/2b7a/4eef/89ba/091c3bf36d72/140120240305549065.pdf" target="_blank" rel="noopener">announced</a> (Japanese only) an Accelerated Block Offering of 1% of Oriental Land shares. The accompanying announcement is worth reading. It's pretty clear.</li>
</ul>


Over two decades, Keisei Electric Railway Co (9009 JP) has been the subject of softer and harder activist efforts to have Keisei monetise its stake in affiliate Oriental Land (4661).
The most recent efforts were by Palliser last fall, briefly discussed here two weeks ago when Keisei announced a buyback. 
Today, Keisei announced (Japanese only) an Accelerated Block Offering of 1% of Oriental Land shares. The accompanying announcement is worth reading. It's pretty clear.


Oriental Land (4661) Placement by Keisei Rail (9009) Says "That's the Door"

<ul>
<li>A week ago, the <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a> AGM took place. The activist which had proposed a shareholder resolution saw ISS and Glass Lewis support.</li>
<li>But that was to no avail as the shareholder proposal got 29.89% of the votes, and 26.15% of total voting rights. This likely informs the near-term future of such proposals.</li>
<li>I expect the ask needs to change, and the agenda item needs to be difficult to be against. </li>
</ul>


A week ago, the Keisei Electric Railway Co (9009 JP) AGM took place. The activist which had proposed a shareholder resolution saw ISS and Glass Lewis support.
But that was to no avail as the shareholder proposal got 29.89% of the votes, and 26.15% of total voting rights. This likely informs the near-term future of such proposals.
I expect the ask needs to change, and the agenda item needs to be difficult to be against. 


[JAPAN ACTIVISM] Keisei Elec (9009) AGM Result Not Salutary, Tough To Win On This Stance

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>Palliser’s proposal failed to meet the challenging two-thirds threshold at the AGM. Given the ownership landscape, this outcome was anticipated.</li>
<li>Palliser nearing 50% approval at Keisei's AGM could signify a triumph, potentially leading to significant pressure on management and a positive shift in share price performance.</li>
<li>
<a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a>'s valuation, now attractively low post a 33% drop and with a potential OP guidance hike, presents minimal downside at a 26.0x EV/OP multiple.</li>
</ul>


Palliser’s proposal failed to meet the challenging two-thirds threshold at the AGM. Given the ownership landscape, this outcome was anticipated.
Palliser nearing 50% approval at Keisei's AGM could signify a triumph, potentially leading to significant pressure on management and a positive shift in share price performance.

Keisei Electric Railway Co (9009 JP)'s valuation, now attractively low post a 33% drop and with a potential OP guidance hike, presents minimal downside at a 26.0x EV/OP multiple.


Keisei Electric Investor Activism Update: The Vote Count Could Shake Keisei’s Board

David Blennerhassett

<ul>
<li>No surprise: <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway (9009 JP)</a> shareholders voted down Palliser's proposal. If the vote was close, Palliser may ups its rhetorical game, and takes a harder stance.</li>
<li>Argyle failed to boot one <a href="https://www.smartkarma.com/entities/china-merchants-china-direct-investments" target="_blank" data-smartkarma-citation="entities:6862:1" rel="noopener">CMCDI (133 HK)</a> director. They'll next target the management agreement renewal; and agitate the company buy back 20% of shares outstanding at 90% of NAV.</li>
<li>The Offeror now has 90.16% in <a href="https://www.smartkarma.com/entities/great-eastern-holdings-ltd" target="_blank" data-smartkarma-citation="entities:13993:1" rel="noopener">Great Eastern Holdings (GE SP)</a> - so this will get suspended at the close of the Offer.</li>
</ul>


No surprise: Keisei Electric Railway (9009 JP) shareholders voted down Palliser's proposal. If the vote was close, Palliser may ups its rhetorical game, and takes a harder stance.
Argyle failed to boot one CMCDI (133 HK) director. They'll next target the management agreement renewal; and agitate the company buy back 20% of shares outstanding at 90% of NAV.
The Offeror now has 90.16% in Great Eastern Holdings (GE SP) - so this will get suspended at the close of the Offer.


Last Week in Event SPACE: Keisei Electric, China Merchants, Great Eastern, Jardine Matheson/JCNC

<ul>
<li>In Oct2023, activist Palliser Capital launched a <a href="https://www.businesswire.com/news/home/20231017540912/en/Palliser-Capital-Responds-to-Media-Article-Regarding-Investment-in-Keisei-Electric-Railway" target="_blank" rel="noopener">campaign</a> on well-known "stub trade" <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a> (1.6% stake). The proposal? Monetise OLC, invest for growth, be shareholder friendly.</li>
<li>Keisei responded 3+mos ago: buyback and 1% OLC stake sale but said OLC would remain an equity affiliate. Palliser re-engaged in late April (<a href="https://www.businesswire.com/news/home/20240423026545/ja/" target="_blank" rel="noopener">Japanese</a>/<a href="https://www.businesswire.com/news/home/20240423405941/en/Palliser-Capital-Proposes-Advisory-Resolution-to-Give-Shareholders-a-Voice-at-Keisei%E2%80%99s-Forthcoming-AGM" target="_blank" rel="noopener">English</a> and <a href="https://www.businesswire.com/news/home/20240429699717/ja/" target="_blank" rel="noopener">two AGM agenda items</a>). Keisei objected.</li>
<li>Palliser <a href="https://mms.businesswire.com/media/20240603986107/en/2149734/1/Attachment_Keisei_Electric_Railway_%E2%80%93_Palliser%E2%80%99s_AGM_Proposal.pdf?download=1" target="_blank" rel="noopener">made their case</a>, Glass Lewis and ISS support Palliser. Palliser likely cannot win. The goal here isn't to win though. It is to get enough to raise management consciousness. </li>
</ul>


In Oct2023, activist Palliser Capital launched a campaign on well-known "stub trade" Keisei Electric Railway Co (9009 JP) (1.6% stake). The proposal? Monetise OLC, invest for growth, be shareholder friendly.
Keisei responded 3+mos ago: buyback and 1% OLC stake sale but said OLC would remain an equity affiliate. Palliser re-engaged in late April (Japanese/English and two AGM agenda items). Keisei objected.
Palliser made their case, Glass Lewis and ISS support Palliser. Palliser likely cannot win. The goal here isn't to win though. It is to get enough to raise management consciousness. 


[JAPAN ACTIVISM] Palliser Gets ISS/GL Nods for Keisei AGM Proposals - How Will The Swing Vote Swing?

Japan

Keisei Electric Railway Co., Ltd. provides passenger rail and bus transportation services in the Metropolitan Tokyo and Chiba prefecture areas.  The Company operates department and supermarket stores, hotels, travel agents, movie theater and restaurants, and sells, leases, and maintains real estate.  Keisei Electric is a shareholder of Oriental Land Co., Ltd. which operates Tokyo Disneyland.

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Keisei Electric Railway Co (9009 JP)

Oriental Land (4661) Placement by Keisei Rail (9009) Says "That's the Door"

Keisei Rail today announced the offering/sale of 16+mm shares (1.0%) of Oriental Land. There will be a special div as a result. The announcement...

Travis Lundy

[JAPAN ACTIVISM] Keisei Elec (9009) AGM Result Not Salutary, Tough To Win On This Stance

Keisei has underperformed OLC by 12% since the day AFTER I wrote this piece. It has underperformed by 30+% since Feb highs. Keisei is down 35%...

Travis Lundy

Keisei Electric Investor Activism Update: The Vote Count Could Shake Keisei’s Board

Palliser's failed proposal at Keisei's AGM was expected due to ownership landscape. However, near 50% approval could lead to pressure on...

Oshadhi Kumarasiri

Last Week in Event SPACE: Keisei Electric, China Merchants, Great Eastern, Jardine Matheson/JCNC

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

[JAPAN ACTIVISM] Palliser Gets ISS/GL Nods for Keisei AGM Proposals - How Will The Swing Vote Swing?

Keisei's AGM is 27 June. After I wrote this, Keisei responded to GL and ISS saying "they don't understand" and misrepresented Palliser's case....

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Oriental Land (4661) Placement by Keisei Rail (9009) Says "That's the Door"

Keisei Rail today announced the offering/sale of 16+mm shares (1.0%) of Oriental Land. There will be a special div as a result. The announcement...

Travis Lundy

[JAPAN ACTIVISM] Keisei Elec (9009) AGM Result Not Salutary, Tough To Win On This Stance

Keisei has underperformed OLC by 12% since the day AFTER I wrote this piece. It has underperformed by 30+% since Feb highs. Keisei is down 35%...

Travis Lundy

Keisei Electric Investor Activism Update: The Vote Count Could Shake Keisei’s Board

​Palliser's failed proposal at Keisei's AGM was expected due to ownership landscape. However, near 50% approval could lead to pressure on...

Oshadhi Kumarasiri

Last Week in Event SPACE: Keisei Electric, China Merchants, Great Eastern, Jardine Matheson/JCNC

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

[JAPAN ACTIVISM] Palliser Gets ISS/GL Nods for Keisei AGM Proposals - How Will The Swing Vote Swing?

Keisei's AGM is 27 June. After I wrote this, Keisei responded to GL and ISS saying "they don't understand" and misrepresented Palliser's case....

Travis Lundy

Palliser's failed proposal at Keisei's AGM was expected due to ownership landscape. However, near 50% approval could lead to pressure on...