(Updates shares; adds ValueAct background)
TOKYO, May 13 (Reuters) – Seven & i Holdings shares surged more than 7% to a two-year high on Thursday after news it was targeted by activist investor ValueAct Capital, which asked the Japanese owner of the 7-Eleven convenience store chain to restructure itself.
ValueAct amassed a $1.53 billion, or 4.4%, stake in Seven & i and wants it to take steps to boost its value, including a potential break-up, Reuters reported.
“We refrain from commenting on individual shareholders’ matters. Not only in this case, but also in the future, we will continue to engage in dialogue with our shareholders,” Seven & i said in an emailed statement when asked for a comment.
Seven & i shares surged to as high as 7.3% in morning trading, compared with a 2% fall of the benchmark Nikkei stock average.
Seven & i became the latest in a growing list of Japanese companies to face pressure from investment funds. Shareholder activism is booming in Japan, driven by a government push to provide higher returns to investors.
San Francisco-based ValueAct has had some notable success in Japan, where companies traditionally have been wary of activist investors.
One of the fund’s partners, Robert Hale, joined the board of Olympus Corp in 2019. Shares in the maker of endoscopes have nearly trebled since early 2019.
ValueAct told its investors on Wednesday in a letter seen by Reuters that it built a 4.4% stake in Seven & i and believes that the sum of its parts is worth much more than its current market value.
The hedge fund said the 7-Eleven business could be worth more than double what its parent is currently valued at if the company restructures itself to focus on the convenience stores or if 7-Eleven is spun out.
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