Institutional Shareholder Services Joins Glass Lewis in Unanimous Endorsement of Palliser’s Proposal for Keisei

• Leading international proxy advisor ISS also recommends that shareholders vote FOR Palliser’s proposal at Keisei’s AGM on June 27, 2024
• Concludes that Management’s approach to capital allocation is inadequate and that Palliser’s proposal will remove an accounting overhang that has long distorted Keisei’s performance and force Management to be more disciplined on capital allocation

LONDON–(BUSINESS WIRE)–Palliser Capital (“Palliser”), the sixth largest shareholder of Keisei Electric Railway Co., Ltd. (9009 JT) (“Keisei” or the “Company”), with a stake of 1.98%, today announced that Institutional Shareholder Services (“ISS”) has joined Glass Lewis in recommending that shareholders vote FOR Palliser’s proposal at Keisei’s Annual General Meeting (“AGM”) on June 27, 2024.

ISS’ support for the proposal—which will require Keisei to implement a capital allocation plan and partially reduce its shareholding in Oriental Land Co., Ltd. (“OLC”) to less than 15% in just under two years—means that the proposal has the unanimous and unequivocal backing of both of the leading international proxy advisors.

Among its favourable findings, ISS notes that¹:

• “…this proposal will remove an accounting ‘overhang’ that has long distorted Keisei’s performance and valuation, forcing management to be more disciplined in its capital allocation decisions and accountable for the performance of Keisei’s operating businesses.”

• “The success of OLC has for years obfuscated the company’s poor operational performance and inefficient capital allocation practices. It has also led to an ever-widening discount to the value of its single largest investment to a point where the market seems to ascribe negative value to its core operations.”

• “Another issue is management’s focus on investing in projects or businesses with little regard for profitability, which underscores a suboptimal capital allocation track record.”

¹ Permission to use quotes was neither sought nor obtained.

James Smith, Palliser’s Founder and CIO, said: “We very much welcome and appreciate ISS’ support—consistent with the positive recommendation received from Glass Lewis. This underpins both the urgent need for change at Keisei and the significant benefits for all stakeholders if our straightforward proposal is adopted. We ask shareholders to make their voices heard at the AGM to unlock Keisei’s intrinsic value and help chart a path for future growth and success.”

Further Information

All information relating to Palliser’s long-running engagement with Keisei and its AGM proposal, including Palliser’s recently published presentation, can be found at: https://www.keisei100.com/. For further inquiries contact Keisei100@pallisercap.com.

About Palliser Capital

Palliser Capital is a global multi-strategy fund. Our value-oriented investment philosophy is applied to a broad range of opportunities throughout 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 is the sixth largest Keisei shareholder with a stake of 1.98%. All available materials concerning Palliser’s ongoing engagement with Keisei can be found at: https://www.keisei100.com/.

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