The Japanese parent company of 7-Eleven fights through a takeover by a Canadian rival and announced a large business commotion on Thursday with the appointment of the first Chief Executive born abroad.
Seven & I Holdings said that Stephen Dacus, 64, a member of the company's board and the old retail director from the United States, would take on the role in May. It also said that it was planning to keep a first public offer from his American convenience shop company, which operates more than 13,000 7-Eleven locations in the country.
The movements are the newest attempt by the company to prevent it from being taken over by the Retail group Alimentation Couche-Tard, the Canadian owner of the Circle K Conference Store Chain. That company has offered around $ 47 billion for control over Seven & I, the biggest bid ever abroad for a Japanese company.
The business landscape of Japan, which in many ways have been against change in many ways, begins to shift in the light of an intake of attention from foreign investors. The rescheduling at Seven & I, whose convenience stores are so omnipresent in Japan that they are considered part of the national infrastructure, is the latest example of that transformation.
Activist investors have long already pushed to turn off his 7-Eleven supermarket companies, with the argument that this would improve the valuation of the vast retail group, whose companies varied from supermarkets to points of sale that sold things as stationery and baby goods.
Seven & I said on Thursday that it had closed a deal to sell some of those peripheral retail companies to a unit of the private equity giant-giant Bain Capital for around $ 5.5 billion. It also said that it would be to buy back for more than $ 13 billion in its shares for the tax year 2030 to increase their value.
“We are now at a critical bending point,” Mr Dacus said at a press conference in Tokyo. With his recent restructuring efforts, he said, Seven and I rotate from a “general retailer” to a “worldwide champion of the supermarket” that would focus on bringing food from Japanese quality to foreign markets, including the United States.
The options of Seven & I for resisting acquisition by Couche-Tard have decreased. At the end of last month, a bid from Junro Ito, a son of Seven & I's founder, fell to dismantle it private after he had not obtained the necessary financing.
Mr Ito's proposal received support from some within the upper ranks of the company who saw it as a way to keep 7-Eleven in Japanese hands. The conviction was that a buy-out guided by the founders could help maintain a corporate culture that prioritizes values such as quality and customer experience above what it regards as the typical Western focus on shareholders' returns and large profit.
Couche-Tard said it would respect and try to learn from the operating methods of Seven & I.
When Mr Dacus steps into his new role, he will have to convince shareholders that the new structure of Seven & I and a leadership team under the leadership of him and others of the existing management can stimulate growth without the need for a sale.
The former leaders of Seven & I and the current Chief Executive, Ryuichi Isaka, his Japanese managers who have risen by the internal ranks, while Mr Dacus has held top positions in a number of global brands.
Mr. Dacus, who speaks Japanese and English fluently, also worked for years in Japanese retail trade, including stints at the parent company of Uniqlo and as Chief Executive of Walmart Japan. He often spoke during Thursday's press conference about his experience working night shifts on a 7-Eleven, where his father was a franchisee.
Under Mr. Isaka, Seven & I tried to make themselves more valuable by moving from under-performing companies to concentrate on 7-Eleven stores in Japan and abroad. In October the company announced plans to distract its supermarket division and other peripheral units in a separate holding. It also set an objective of approximately the annual turnover to around $ 200 billion in 2030.
In recent months, however, Seven & I's supermarket companies have stagnated in Japan. The situation has been worse in overseas markets such as the United States. During the three months ending in November, the business income of Seven & I's overseas supermarket retail companies fell one third of a year earlier.
Before the announcements on Thursday, the shares of Seven & I had fallen more than 6 percent compared to earlier in the week, when a Japanese media report said that the company was planning to refuse the offer of Couche-Tard. Seven & I refused the report and said on Thursday that it was still busy with the Canadian retailer and considering the bid.
Weak growth and increasing pressure from investors to negotiate a deal with Couche-Tard had led Zeven & I to increasingly regard Mr Dacus as a candidate for the top track in recent months. He was chairman of the independent committee that evaluated the takeover of Couche-Tard, but said on Thursday that he would step out of that role.
