NEW YORK, April 24 (Reuters) - An investor group is urging Toyo Suisan Kaisha to consider exiting its legacy business plus raise its dividend and buy back shares, arguing these steps could roughly double the Japanese ramen noodle maker's share price, a report seen by Reuters says.

The group, led by private equity firm Nihon Global Partners Management, owns a 3.8% stake in the company, which owns Maruchan Inc, a hugely popular instant noodle maker. Together the investors submitted four shareholder proposals which, if passed at this year's annual meeting, may lift the share price to roughly JPY 17,300, the report says.

Nihon Global Partners, which invests in Japanese listed companies that are growing rapidly outside of Japan, said the company should exit its refrigerated warehouse business and consider a sale to strategic buyer or a public listing.

It also proposed Toyo Suisan separate its processed foods and seafood trading business, arguing the businesses are not large or competitive enough to cover their cost of capital.

"We see no strategic reasons to continue holding the legacy businesses but many good strategic reasons for exiting them," the report said. Toyo Suisan's return for shareholders has lagged rival Nissin by more than 20% from 2021 to 2023, the report said, noting this gap can be closed.

A representative for the company was not immediately available for comment.

More immediately, the investor group wants the company to increase its dividend payout ratio to 40% from its historical levels of around 30%, arguing an increase would not hurt the company's ability to invest in the future and would bring it more in line with peers' payouts.

It also wants the company to buy back JPY20 billion worth of stock, or 2% of shares outstanding and revamp director and management compensation to tie 40% of compensation to performance.

Finally the investor group wants a better explanation of how management spends capital, including why billions are funneled into the legacy business instead of the global noodle business, for example.

"We believe our proposals will help to narrow the gap between the company's current share price and its long-term corporate values," the report said.

Nihon Global Partners and its allies have met with the Toyo Suisan's investor relations staff over the past year. It also asked to meet with senior management and board members before submitting its shareholder proposals.

Shareholder proposals gained more traction in Japan last year as a number of resolutions received greater support, according to data from proxy solicitor Georgeson, at a time momentum in shareholder activism is growing in the world's third-largest economy. (Reporting by Svea Herbst-Bayliss Editing by Alistair Bell)