SEVEN & i Holdings shares tumbled on Tuesday (Mar 4), dropping as much as 10 per cent, after the Yomiuri newspaper reported the company plans to rebuff a proposed takeover by Alimentation Couche-Tard.
The Japanese retailer will instead seek to boost valuation on its own after a management buyout by the founding Ito family was scrapped, Yomiuri said.
A special committee reviewing the offer decided in favour of keeping the Japanese convenience store chain independent because of antitrust concerns in the US, the newspaper reported, without saying where it got the information.
The planned rejection may still face pushback from investors frustrated over Seven & i’s slow-moving efforts to unlock the value of its famous franchise. The retailer’s market capitalisation is about 5.2 trillion yen (S$47 billion), below the US$47 billion takeover proposal by Couche-Tard, owner of Circle K shops.
Shares also plunged last week, when a proposal to take the company private by its founding family and Itochu – designed to fend off Couche-Tard – collapsed.
Seven & i said it did not announce the rejection and declined to comment further. Couche-Tard declined to comment on the Yomiuri report.
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While it seems clear that the management wants to remain independent, investors are starting to get tired of holding the stock without some kind of returns, said Amir Anvarzadeh, Japan equity strategist at Asymmetric Advisors.
“Although I think that mainly means Seven & i will be speeding up the restructuring and most likely to raise shareholders payout, investors want a quick buck and are likely to sell the name and move on if there’s no event,” said Anvarzadeh.
Seven & i will appoint board member Stephen Dacus as chief executive officer to replace Ryuichi Isaka, the Nikkei newspaper reported on Monday, in changes seen as a renewed effort to prevent a takeover.
Dacus, who worked for decades in the Japanese retail industry, leads the special committee evaluating the proposed buyout by Couche-Tard. BLOOMBERG
