Seven & i Holdings Co. will sell an underperforming retail business, replace its chief executive and buy back shares to strengthen its case for repelling a $47.5 billion takeover proposal by Alimentation Couche-Tard Inc.
Stephen Dacus, the director leading the board committee evaluating the Canadian retailer’s approach, will take over from Ryuichi Isaka as CEO, Seven & i said in a statement Thursday. The company, hich pledged to buy back shares worth ¥2 trillion ($13.6 billion) over the next few years, also plans to list its US business and cut its holdings in a banking unit.
The fusillade of restructuring measures follows years of investors pushing the sprawling Japanese retailer to unlock value and focus more on convenience stores, its most profitable and successful business. Years of inaction led to an undervalued share price, attracting activist investors as well as Couche-Tard, which proposed to buy the company last year.
With an attempted management buyout no longer an option, the question is whether Seven & i’s bold new measures will be enough to convince shareholders that it can go it alone.
“The share buyback move is an attempt to try to lift market value to help fend off the bid,” said Lorraine Tan, an analyst at Morningstar Asia Ltd. “We view the appointment of Stephen Dacus to be generally positive.”
Although a Bloomberg report of the share buyback lifted Seven & i’s shares by 6.1% before Thursday’s announcement, the company’s valuation of ¥5.5 trillion remains stuck below Couche-Tard’s proposal by roughly 22%.
Still Committed
The Canadian owner of Circle K stores said last week that it remains committed to negotiating a deal with Seven & i, although it has yet to gain access to the company’s books in order to make a firmer offer.
Seven & i struck a deal to sell its superstore business for $5.37 billion to a unit of Bain Capital, which said it will take the business public within three years, while Seven & i indicated that it plans to reinvest in the unit.
Separately, the Japanese retailer will pursue an initial public offering of its 7-Eleven convenience stores business in the US in the second half of 2026, and also divest Seven Bank Ltd., deconsolidating the unit.
