Big buy: A shopper leaving a 7-Eleven convenience store in Kawasaki, Japan. — Bloomberg
Tokyo: An investor in Seven & i Holdings Co is urging the company to engage with suitor Alimentation Couche-Tard Inc and provide an update on the buyout bid by next month, citing the “poor track record” of the Japanese operator of 7-Eleven stores in creating value for shareholders.
US-based asset manager Artisan Partners asked Seven & i to brief shareholders on the status of takeover negotiations by Sept 19 in a letter sent to the board last Friday, warning the company will be “held accountable” if it doesn’t open negotiations.
Artisan’s portfolio managers David Samra and Ben Herrick cited the “historic implications” of a bid that could represent the biggest takeover of a Japanese company by a foreign suitor.
Couche-Tard was “uniquely positioned” to enhance shareholder value and negotiating with the company would be “the best tactic to preserve positive stakeholder outcomes in Japan”, Samra and Herrick said.
The Canadian operator of US convenience-store chain Circle K hasn’t disclosed terms or a price for its proposed buyout of Seven & i, which currently has a market value of 5.47 trillion yen or about US$37bil.
The investors, whose clients currently own over 1% of the company’s shares, also criticised potential government intervention, saying it would run counter to recent reforms aimed at stimulating mergers and acquisitions activity.
The Japanese convenience store giant is seeking government protection through a designation as a “core” company under the Foreign Exchange and Foreign Trade Act, an upgrade that would require prior notification to the government of any purchase of its shares above 10%, Bloomberg reported last week.
“Given the company’s poor track record of value creation, we encourage you to take this opportunity to prioritise shareholders,” Samra and Herrick said. — Bloomberg
