By Svea Herbst-Bayliss
BOSTON (Reuters) – ValueAct Capital is urging Seven & i Holdings, the Japanese owner of the 7-Eleven convenience store chain, to listen to shareholders’ concerns and form a committee to consider strategic alternatives, including a possible sale, according to a letter seen by Reuters.
In a rare public statement, ValueAct is voicing concerns at a time of growing shareholder frustration after several investors pushed the company to split apart.
The U.S. based investment firm wrote to Seven & i Holdings’ board to say it must quickly pursue “bold, structural reform”. It called the company “strategically unfocused” and said it is “vastly underperforming its potential.”
ValueAct, which owns 4.4% of the company, said it is making two requests of the board.
It wants one or more outside directors to contact portfolio managers at 30 of the company’s biggest investors to “listen directly to their views.”
And it wants the company to create a “Strategic Review Committee”, made up of only outside directors to consider whether the “sale or spin-off of divisions or a business combination with a third party would deliver superior value and strategic benefits to the company and its stakeholders.”
To put extra pressure on the board, ValueAct said it wants to hear a public response after the next regularly scheduled board meeting early next month.
ValueAct is publishing its letter to the board at a time of growing shareholder frustration with the company’s lagging stock price.
Such a public move marks a highly unusual step for ValueAct which has spent decades building a reputation for working collaboratively with management instead of dictating terms publicly as many activist investors have done.
(Reporting by Svea Herbst-Bayliss; Editing by Chizu Nomiyama)
