“Seven & I Holdings Appoints First Foreign CEO in Response to Takeover Bid”
Outgoing CEO Ryuichi Isaka of Seven & I Holdings (left) shakes hands with incoming CEO Stephen Dacus (right) at a press conference in Tokyo. – Photo by Issei Kato/Reuters
In a strategic move to counter a $47 billion overseas takeover bid, Seven & I Holdings, the Japanese operator of the 7-Eleven convenience store chain, has appointed its first foreign CEO. Stephen Dacus, the lead outside director, will take over as chief executive on May 27, succeeding Isaka.
The decision comes after a turbulent period for Seven & I, sparked by a buyout offer from Canadian Circle-K operator Alimentation Couche-Tard. In response, the company announced a comprehensive leadership and business restructuring plan. Dacus emphasized that talks with Couche-Tard would continue but acknowledged regulatory challenges that could hinder a potential merger.
As part of the restructuring, Seven & I will sell its superstore unit to Bain Capital for 814.7 billion yen and reduce its ownership of Seven Bank. The company also unveiled a share buyback plan worth approximately 2 trillion yen through fiscal year 2030 and outlined intentions to list its North American convenience store subsidiary by 2026.
Despite these initiatives, concerns remain about the funding of dividends and buybacks. Analysts speculate that the restructuring may not deter ACT’s bid, as the divestitures focus on the convenience store businesses, which align with the interests of the potential acquirer.
Shares of Seven & I surged following the announcement of the share buyback plan, indicating market optimism. While the company’s strategic moves aim to enhance shareholder value and fortify its position against the takeover bid, the outcome remains uncertain in the evolving international power play.
In approximately three years, Seven & I transformed the modest 7-Eleven store into a popular culinary destination in Japan by offering fresh sandwiches, rice balls, and a variety of boxed lunches, revolutionizing the eating habits of millions. Isaka has been an integral part of the 7-Eleven management team since 1980, assuming the role of president in 2016. However, his leadership has faced criticism from foreign investors, such as ValueAct Capital, who attempted to remove him in 2023 due to what they perceived as a flawed business approach.
Under Isaka’s guidance, Seven & I made a significant $21 billion acquisition of Marathon Petroleum’s Speedway gas stations in 2020, surpassing ACT and significantly expanding the company’s presence in the North American market. Nonetheless, some industry analysts and investors argued that the company overpaid for its US assets while also being burdened by low-margin subsidiaries in Japan, particularly its superstore segment.
Critics highlighted that Seven & I ventured into the global market without establishing a strong foundation, leading to missteps in their business strategy. Seeking to address these challenges, Isaka presented a revitalization plan in October, aiming to double sales to 30 trillion yen by 2030 by expanding internationally and emphasizing fresh food offerings.
Despite facing pressure from US-based Artisan Partners to consider competitive takeover offers, Isaka remained steadfast in focusing on the food-centric strategy, aiming to introduce high-quality Japanese food products to the American market. The potential acquisition of Seven & I by ACT would mark a significant foreign takeover of a Japanese corporation, with the company being identified as a key asset to Japan’s national security.
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