Seven & i Holdings and Couche-Tard Negotiation

TOKYO (Reuters) – Japan’s Seven & i Holdings must act swiftly to negotiate a takeover bid from Canada’s Alimentation Couche-Tard, according to a fund manager at shareholder Artisan Partners (NYSE:APAM) Asset Management.

Couche-Tard, which owns Circle-K convenience stores, announced last week that it had approached Seven & i about a potential acquisition. While the deal value has not been disclosed, this acquisition could become the largest overseas buyout of a Japanese firm.

Artisan Partners has criticized Seven & i’s management and structure since 2019 but describes itself as an active, rather than an activist, shareholder, engaging with corporate management and boards.

Fund manager Ben Herrick advocated that Seven & i’s board negotiate with Couche-Tard while the offer is still friendly to boost the chances of a favorable outcome for stakeholders. He did not comment on any communication with Seven & i’s management, which has refrained from discussing individual shareholders.

Herrick stated, “The most important part of this deal, for both the reputation of the board and for corporate Japan, is that shareholders receive a fair, independently managed process.” He emphasized the potential historic implications of the outcome.

Artisan controls 0.85% of Seven & i’s outstanding shares, according to LSEG data. It has been reported that both Artisan and activist investors Third Point and ValueAct Capital have criticized Seven & i for inadequate returns and poor corporate governance.

Herrick claimed that Artisan’s advocacy led to the establishment of an independent board and chairman at Seven & i who can hold management accountable and “realize the value of this world-class asset.” He concluded by stating that they did not reach this point due to exemplary corporate oversight and capital allocation.