Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

ValueAct urges 7-Eleven owner to examine alternative strategies

Stock MarketsJan 25, 2022 03:10PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: A 7-Eleven storefront in Toronto, Ontario, Canada December 13, 2021. REUTERS/Carlos Osorio/File Photo 2/2

By Svea Herbst-Bayliss

BOSTON (Reuters) -ValueAct Capital has called on 7-Eleven's owner Seven & i Holdings to listen to shareholder concerns and to consider strategic alternatives, including a possible sale.

U.S.-based investment firm ValueAct has written to the Japanese company's board to say it must quickly pursue "bold, structural reform", calling it "strategically unfocused" and saying it is "vastly underperforming its potential".

There has been growing frustration among investors in the 7-Eleven convenience store chain's owner about its lagging share price, with some shareholders pushing it to break up.

Seven & i should "consider alternative ownership structures for its business units as well as the whole company to achieve the focus necessary to improve competitiveness and performance of the businesses, especially 7-Eleven," ValueAct's letter said.

ValueAct, which owns a 4.4% stake in Seven & i, said it is making two requests of the board and was making the letter public, a rare step for the investment firm.

To put extra pressure on the board, ValueAct said it also wants to hear a public response to its requests after the next regularly scheduled board meeting, which is in early February.

It said it wants one or more outside directors from Seven & i to contact portfolio managers at 30 of the company's biggest investors to "listen directly to their views."

And it called for the creation of a "Strategic Review Committee", made up of only outside directors to consider whether the "sale or spin-off of divisions or a business combination with a third party would deliver superior value and strategic benefits to the company and its stakeholders."

Such a public statement is a highly unusual step for ValueAct, which has spent decades building a reputation for working collaboratively with management instead of dictating terms publicly as many activist investors have done.

It is one of a small number of U.S. firms that have invested more heavily in Japanese companies and have quietly tried to work with management and the boards to make some changes.

Its holding in Seven & i follows investments in Nintendo Olympus Corp and JSR Corp.

While ValueAct had engaged with Seven & i privately it said the response "has been unsatisfactory", adding that it has "lost confidence in management's ability to set the strategic course without direct and public input from independent shareholders."

ValueAct is the biggest actively managed institutional shareholder in Seven & i. Fund managers T. Rowe Price and Artisan Partners (NYSE:APAM) and pension fund California Public Employees Retirement System hold smaller stakes.

In its letter, ValueAct also said that it may make shareholder proposals at the company's annual meeting.

This week the Financial Times reported that three investors, who have previously told the company that sweeping reform is necessary, may also submit proposals at the meeting expected to take place in May or June.

ValueAct urges 7-Eleven owner to examine alternative strategies
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email