Palliser Capital Proposes 3.8 Billion Dollar SMC Buyback

London-based activist fund Palliser Capital has acquired a significant stake in SMC CORP, a major factory automation firm based in Japan. According to a letter reviewed by Reuters, the activist investor is urging the company to initiate a 600 billion yen ($3.8 billion) share buyback over the next two years and maintain a dividend payout ratio of at least 40%.

Palliser, which is headquartered in the United Kingdom, argues that while SMC has demonstrated foresight in expanding production capacity, the company remains significantly undervalued. The fund suggests that the manufacturer, which produces essential components for chipmaking such as valves and actuators, should pivot its focus toward improving margins and capacity utilization.