Seven & I Says ValueAct’s Board Proposal Risks Destroying Value

Activist fund ValueAct Capital Management LP’s proposal to appoint new directors to Seven & i Holdings Co.’s board risks destroying shareholder value, the company said in presentation materials released on Tuesday.

(Bloomberg) — Activist fund ValueAct Capital Management LP’s proposal to appoint new directors to Seven & i Holdings Co.’s board risks destroying shareholder value, the company said in presentation materials released on Tuesday.

Three of ValueAct’s nominees “have no food or retail experience and the fourth has a highly checkered history with no relevant experience in the past five years in a rapidly evolving industry,” the convenience-store operator said. “7&i’s nominees have deep knowledge of the challenges and opportunities in our business as executives and directors, along with a track record of creating value and taking proactive steps to streamline our business to abandon its conglomerate structure.”

Seven & i said recently it will consider strategic options, including spinoffs and public listings. A new review committee of outside board members will recommend changes and execute them, the retailer’s eight independent directors said on April 6.

ValueAct has been pushing Seven & i to improve its valuation, calling on the Tokyo-based retailer to “pursue bold, structural reform and pursue it with urgency.” The investor said Seven & i should narrow its business focus to 7-Eleven, which it said could become a global champion as a convenience store franchise and boost the company’s value.

Seven & i has more than 83,000 stores worldwide, including the Speedway gas-station franchise in the US. The company is best known for its 7-Eleven stores, and its operations include Denny’s Corp.’s Japan restaurants, the Ito-Yokado supermarket chain and even its own bank.

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