Seven & i Holdings Co. plans a sweeping revamp of its board at its annual shareholders meeting next month as a part of its effort to boost the value of the Japanese retailer and fend off a US$47.5 billion takeover proposal by Alimentation Couche-Tard Inc.
The 7-Eleven convenience store operator plans to add five new directors to the board, four of whom will be from outside the company, including Takashi Sawada, former president of rival FamilyMart Co. and Christine Edman, former head of H&M Hennes & Mauritz AB’s Japan unit, Seven & i said in a statement Thursday. The company will also seek a vote on the appointment of Stephen Dacus as chief executive officer, replacing Ryuichi Isaka, who will retire, along with two other board members.
Junro Ito, a member of the founding Ito family and executive vice president of Seven & i, will become the chairman, the statement said.
The company unveiled a fusillade of restructuring measures in March, including the announcement of Dacus as the new CEO, buying back ¥2 trillion of shares, listing its U.S. business, and cutting holdings in its banking and supermarket units. Shareholders will vote on the board’s proposals in May.
The changes are aimed at addressing shareholders’ concern the retailer is undervalued at a time when Canadian rival Couche-Tard has offered to buy the company. While investors have been vocal about the need for Seven & i to engage with the takeover offer, they are yet to put forth any proposals of their own for vote at next month’s annual general meeting. The lack of shareholder proposals indicates that the management still has their support as it undertakes an overhaul.
The convenience store operator’s AGMs have not always been straightforward affairs. Two years ago, the company had a showdown with activist investor ValueAct Capital Management LP., which sought to appoint its own candidates to the board with the power to pick a new president.
Shareholder activism has been bolstered by years of weak investor returns, as well as making the company a target for takeover by Couche-Tard. Seven & i is valued at around ¥5.1 trillion, roughly 30 per cent below the proposed takeover price.
Seven Eleven Japan will elevate Tomohiro Akutsu to be the head of the business, replacing Fumihiko Nagamatsu, who’ll become the chairman of the unit, it said.
Kanoko Matsuyama, Bloomberg News
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