Dive Brief:
- Seven & i Holdings, parent company of 7-Eleven, has outlined why it declined to make changes suggested by activist investor ValueAct Capital, saying its proposal was based on a “superficial understanding” of how the company operates, according to a Tuesday presentation released by the company.
- It also appointed two new directors, replacing one who left late in 2022 and another whose term is ending, effective May 25. Neither appointee was among four potential directors recently suggested by ValueAct.
- This is the latest stage in a back and forth between the two companies, as San Francisco-based ValueAct has pressured Seven & i into spinning off its convenience store business into a separate entity.
Dive Insight:
The presentation claims that Seven & i has engaged with ValueAct more than 30 times since the latter first reached out, including in early 2022 when the investment company argued for “governance interventions and strategic alternatives.” Seven & i agreed, and as a result added six independent outside directors.
It also led Seven & i to review its department store business, eventually resulting in it agreeing to sell all shares of Sogo & Seibu to Sugi Godo Kaisha. There is not currently a date for that deal to close.
Most recently, ValueAct had nominated four potential board members who Seven & i later said had “limited retail or food experience.”
“Three of VAC’s nominees have no food or retail experience,” Seven & i said in its presentation. “And the fourth has a highly checkered history with no relevant experience in the past five years in a rapidly evolving industry.”
So while Seven & i clearly found value in some of ValueAct’s previous propositions, it called the current one a “short-sighted approach” and said that “ValueAct has not shown any concrete growth strategy and overly focused on a spin on 7-Eleven and continues to be close-minded.”
7-Eleven has more than 79,000 stores across 20 countries, including over 20,000 in Japan and 13,000 in the U.S.
