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Seven & i Shareholders Dismiss ValueAct Capital's Board Slate

The company predicts stronger synergies between its convenience and supermarket businesses.
Seven & i & 7-Eleven logos

TOKYO — Seven & i Holdings shareholders rejected efforts to place new leadership on the company's board of directors during their annual meeting on May 25.

President and CEO Ryuichi Isaka and other Seven & i-backed candidates were all reelected to the board while all four candidates nominated by activist investor ValueAct Capital were voted down.

Vote results released by the company showed that Isaka received 76.36 percent of shareholder votes. ValueAct's candidates' support ranged from 25.52 percent to 34.13 percent of votes.

Approximately 10 percent of Seven & i is still owned by the founding family, and the presence of activist investors is small, reported Reuters. According to investors, this means support of more than 30 percent for ValueAct candidates would be significant.

[Read more: Calls for Seven & i Holdings to Spin Off 7-Eleven Grow Louder]

ValueAct stated that many of the world's largest institutional investors had voted in favor of new leadership and "a more decisive growth strategy."

"We look forward to engaging constructively with Seven & i representatives and our fellow shareholders to discuss next steps in response to these strong signals," ValueAct said in a post-vote release statement.

ValueAct, which owns 4.4 percent of Seven & i, has been pushing for potential a spinoff of the 7-Eleven convenience store chain and a general shift in strategy for around two years. However, the company criticized ValueAct's slate of director nominees, citing a lack of experience in significant business transformations, and reaffirmed its c-store business as its pillar of growth, alongside foodservice.

Earlier in May, proxy advisors Institutional Shareholder Services and Glass Lewis threw their support behind ValueAct's nominees.

Following the vote, Seven & i is prepared to continue moving forward with its plans for c-store and food offerings.

"We believe synergies between our supermarket and convenience store businesses will be even stronger from now on," Isaka stated during the shareholders' meeting.

Seven & i Holdings is the parent company to Irving, Texas-based 7-Eleven Inc., which 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.

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