Can Seven & i Improve its Value on its Own? Management Shakeup Follows Takeover Attempt

The Yomiuri Shimbun

7:00 JST, March 5, 2025

Can Seven & i Holdings Co. eliminate the risk of a takeover? Analysts say it will be difficult unless the major Japanese convenience store operator presents specific measures to improve its corporate value on its own.

Seven & i plans to reject a takeover bid by major Canadian convenience store operator Alimentation Couche-Tard Inc. and will likely change its top management as a way to improve its corporate value. It is currently arranging to have President Ryuichi Isaka step down and appoint outside director Stephen Hayes Dacus as his successor.

The plan for a change of president came about suddenly when a management buyout (MBO) plan proposed by Seven & i’s founding family to counter Couche-Tard’s takeover bid ended up in failure. The family had considered an MBO of ¥8 trillion to ¥9 trillion but failed to secure funding. The company announced Thursday that the founding family had abandoned its MBO effort.

Within Seven & i, there is a strong feeling of aversion against Couche-Tard’s acquisition bid. After the MBO plan being given up, the only option left was for Seven & i to improve corporate value on its own. By replacing its top management, it intends to promote measures to that end.

However, one member of the board of directors said of Isaka’s impending departure: “Improving corporate value on our own was what Mr. Isaka has been sticking to. It’s inexplicable if he is to leave.”

Even so, after Isaka became president in 2016, he was urged by U.S. investment fund ValueAct Capital to focus on the convenience store business. And in 2023, he was asked to step down.

“With Mr. Isaka remaining in his position, it would be difficult to gain the understanding of shareholders, as expectations would be low,” one company executive said.

‘Intelligent person’

Dacus, who will likely succeed Isaka, is a professional manager with expertise in the Japanese distribution and retail industries. Dacus, 64, had served senior management positions at Fast Retailing Co., which operates Uniqlo and other casual clothing stores, and also at Walmart Stores, Inc. of the United States before becoming chief executive officer of major supermarket operator Seiyu Co. He also was an executive of the parent company of the sushi chain Akindo Sushiro Co. He is fluent in Japanese and has a high level of communication skills in meetings and other situations, according to those close to him.

After Couche-Tard’s takeover plan was revealed, Dacus led the discussions as the head of the outside directors’ special committee. The company’s executive evaluates Dacus as “an intelligent person who listens well to the opinions of those around him and has excellent coordination skills.”

Concerns

Seven & i will hold a board meeting soon to formally decide on the top management personnel and measures to improve corporate value on its own. It will also announce specific measures such as listing shares in its U.S. convenience store subsidiary.

Seven & i’s share price has continued to languish due to delays in spinning off its general merchandise stores, such as Ito-Yokado Co. The share price rise seen after the announcement of Couche-Tard’s proposal and the founding family’s MBO effort is thought to reflect a brief wave of interest by investors who expected a takeover battle.

Analysts are concerned that Seven & i could invite new takeover risks or strong demands form investment funds if the management team fails to raise its share price on its own by improving its corporate value.

A source close to the matter said the MBO plan “had no great purpose, but gave the impression that it was just to protect the founding family.”

A sense of distrust has spread toward Seven & i Vice President Junro Ito, who comes from the founding family.