Key Summary: On April 18, 2024, Nitor Capital Management expressed concerns about Tejon Ranch's performance and management. They aim to reform leadership, compensation, and capital allocation for shareholder value. Tejon Ranch's assets are valued at $1.2 billion, far above the stock price. At the May 14, 2024 AGM, shareholders re-elected all current directors to the Board. Directors opposed by Nitor Capital received approximately 30% withheld votes.Market Cap: $451 million | Tejon Ranch Co., together with its subsidiaries, operates as a diversified real estate development and agribusiness company
On April 18, 2024, Nitor Capital Management LLC (1.75%) issued a letter to the shareholders, expressing concerns about the company's underperformance and management practices. Despite owning approximately 1.75% of Tejon Ranch's shares, they felt the company's assets were undervalued and management had failed to deliver returns to stockholders. They criticized the board's lack of action and misaligned compensation incentives for executives. Nitor intended to withhold votes for certain board members and opposed executive compensation approval at the upcoming Annual Meeting. They emphasized the need for changes in leadership, compensation structure, and capital allocation to unlock the company's potential and deliver value to stockholders.
Valuation insight
Tejon Ranch's valuable income-producing assets and industrial development rights generate over $100 million in recurring annual revenues and $30 million in annual cash flows. Nitor Capital Management estimates these assets to be worth $700 million, or $26 per share. When factoring in additional assets like land, water, and farmland, they believe the total value exceeds $1.2 billion, nearly three times the current stock price.
At the May 14, 2024 AGM, shareholders re-elected all current directors to the Board. Directors opposed by Nitor Capital received approximately 30% withheld votes.
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