UK activist fund Palliser publishes ‘value enhancement plan’ for Toyo Tires

London – UK-based activist investor Palliser Capital has published a detailed proposal urging Toyo Tire Corp. to revamp its strategy, governance, and capital allocation.

The plan, first presented at the Sohn Hong Kong Investment Leaders Conference on 30 May, outlines steps Palliser claims could unlock “more than 45% upside for all shareholders.”

Describing itself as a “significant shareholder in Toyo Tires,” Palliser called the Japanese manufacturer a “premium tire brand with a leading US market share in wide light truck tires.”

However, it argued that Toyo “has consistently underperformed and is materially undervalued.”

Toyo Tires, it said, is trading “at a significant discount” to peers across key valuation multiples, despite its “far superior revenue and profitability profile.”

Palliser said the value gap is “readily solvable” and, if addressed, could deliver substantial shareholder returns.

Key elements of the proposed plan include adopting “best-in-class performance targets and incentive structures” to better align management with shareholders.

Palliser also called for a “TSE-aligned capital allocation framework, grounded in clear and distinct metrics, returns and hurdle rate[s].”

In addition, it urged Toyo to undertake “a comprehensive review of all strategic options to maximise stakeholder value.”

These, Palliser said, include “privatisation and resolving overhang from Mitsubishi’s investment in the company.”