TOKYO — Seven & i Holdings is pushing back against activist investor ValueAct Capital's nomination of four candidates to the company's board of directors, citing a lack of experience.
"None of ValueAct's nominees have experience in significant business transformations," Seven & i said in a statement.
Candidates nominated by ValueAct include Brittni Levinson, ValueAct's sustainability chief, and Dene Rogers, a former RadioShack and Sears executive, reported Reuters.
ValueAct previously called on 7-Eleven Inc.'s parent company to remove four directors from the board, citing a "failed corporate structure," and notified Seven & i that it planned to make a shareholder proposal regarding the appointment of directors one of items for the 18th annual shareholders meeting scheduled for May 25.
On April 18, the current Seven & i board of directors held a meeting during which it made a resolution on director nominees and its opinion regarding the shareholder proposal. The board agreed to reappoint 13 or 14 directors, including current Board President Ryuichi Isaka and two other directors that ValueAct wants to replace.
"Our nominees have Japanese and international strategy experience and business execution experience through all business cycles," the board continued.
It noted that Seven & i continues to hold the policy of positioning its convenience store business in Japan and the United States as the pillar of its growth, while also positioning food as its strength. As a these strategic efforts, the company is achieving "steady growth" in its earnings, with consolidated revenues from operations and operating profit both reaching record levels in fiscal year 2022.
The board also called ValueAct's spinoff proposals "short-sighted" and "based on superficial understanding" of its businesses in a presentation document, while also noting the various productive steps the company has already taken to increase value, such as divesting its department store business in Japan.
"Seven & i has been steadily evolving the business, achieving a significant transformation in recent years. ValueAct's proposal would effectively halt this momentum," the board stated.
The board confirmed that it still intends to review the company's optimal group structure and strategic alternatives, including a potential initial public offering or spinoff.
The full letter is available here.
ValueAct responded by criticizing Seven & i for allegedly avoiding answering stakeholders' fundamental, strategic questions over a period of years.
"Here, we have observed a troubling pattern of decisions to protect management's status quo interests despite poor performance," ValueAct said in a statement.
Irving, Texas-based 7-Eleven operates, franchises and/or licenses more than 13,000 stores in the United States and Canada. In addition to 7-Eleven stores, the company operates and franchises Speedway, Stripes, Laredo Taco Co., and Raise the Roost Chicken and Biscuits locations.