Seven & I Holdings, the Japanese operator of the 7-Eleven convenience store chain, has appointed Stephen Dacus as its first foreign CEO. Dacus, who will take over on May 27, is tasked with restructuring the company to resist a $47 billion takeover bid from Canadian firm Alimentation Couche-Tard (ACT). The announcement follows a challenging six months for Seven & I, which began when ACT made its initial buyout offer.
Dacus, who has previously held executive roles at Walmart and Fast Retailing, emphasized that significant regulatory hurdles make a merger unlikely. “What I do not think our shareholders would want is for us to spend two plus years in limbo just for that to be rejected by the US courts,” he stated.
In a broader restructuring effort, Seven & I plans to sell its superstore unit to Bain Capital for 814.7 billion yen ($5.50 billion) and reduce its ownership of Seven Bank to below 40%. Additionally, the company will buy back approximately 2 trillion yen ($13.5 billion) worth of shares through fiscal year 2030 and aims to list its North American convenience store subsidiary by the second half of 2026.
The company has faced criticism over its capital allocation strategies for years. In response to ACT’s offer, a group led by Seven & I’s founding Ito family attempted a competing buyout but failed to secure the necessary $58 billion in funding.
Dacus, who led the special committee vetting the takeover bids, expressed his connection to 7-Eleven franchisees, noting his father’s involvement in the business. He plans to continue focusing on fresh-food offerings, aiming to replicate the success of 7-Eleven’s Japanese stores in the US market.
Despite the announced divestitures, some analysts believe ACT may still pursue a deal. Travis Lundy, a special situations analyst, noted that the divestments leave Seven & I primarily with its core convenience store businesses, which are ACT’s main interest.
Bain Capital plans to list the superstore unit, York Holdings, within three years after expanding it through acquisitions. Meanwhile, outgoing CEO Ryuichi Isaka has faced criticism for his strategies, including the $21 billion acquisition of Marathon Petroleum’s Speedway gas stations in 2020.
Seven & I shares surged 6.1% following Bloomberg’s report on the share buyback plan. However, concerns remain about how the company will fund its dividends and buybacks, with some analysts suggesting borrowings may be necessary.
If ACT succeeds in acquiring Seven & I, it would mark the largest foreign takeover of a Japanese company. Despite being classified as “core” to Japan’s national security, the finance ministry has stated it would not create obstacles for a takeover.
— news from CNN