Seven & i Holdings Co. recently announced a restructuring plan that a shareholder believes is a last-minute effort to fend off a takeover proposal from Alimentation Couche-Tard Inc. The shareholder, Artisan Partners International Value Team, stated that the board should engage in negotiations with the Canadian operator of Circle K stores to maximize shareholder value.
The restructuring plan involves splitting Seven & i into two businesses: one focusing on 7-Eleven, convenience stores, and gasoline stations, and the other comprising 31 less profitable retail operations that may attract strategic partners. Couche-Tard had offered a potential acquisition price of ¥7.1 trillion (US$47.6 billion) before the restructuring plan was announced.
Artisan Partners argued that the price offered by Couche-Tard is superior to the speculative value that could be achieved through the restructuring plan. The shareholder emphasized the need for transparency by disclosing the members of Seven & i’s special board committee to maintain accountability.
Seven & i plans to retain a minority stake in the retail business that will be separated and named York Holdings Co. An investor relations day is scheduled for October 24 to provide more information on the restructuring initiative. Artisan Partners pointed out that Seven & i has historically faced challenges with oversight and accountability, leading to a persistent valuation discount.
The shareholder urged the company to ensure fair, independent, and transparent processes to maximize shareholder value at this critical juncture. Seven & i’s shares are currently trading below Couche-Tard’s proposed price, indicating market skepticism about a potential deal. Despite the uncertainty, the shareholder’s letter highlights the importance of prioritizing shareholder interests in the decision-making process.
