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Business Times
18-07-2025
- Business
- Business Times
Seven & i risks becoming buyout target again if turnaround fails
[TOKYO] Even after fending off Alimentation Couche-Tard's unsolicited 6.77 trillion yen (S$58.5 billion) takeover approach, Seven & i Holdings remains a buyout target in the eyes of some investors, who say new suitors may emerge unless the operator of 7-Eleven convenience stores turns around its business. 'If the stock price drops significantly, there might be a possibility of tender offers or hostile takeovers,' said Takamasa Ikeda, senior portfolio manager at GCI Asset Management, an investor in Japanese stocks. While Seven & i shares are higher than they were before Couche-Tard's interest became public in August 2024, they fell after the proposal was withdrawn this week and are down by more than a fifth this year. Newly appointed chief executive officer Stephen Dacus is under pressure to convince stakeholders that sweeping reforms will deliver, especially in the US and Japan, where inflation and weak demand are weighing on profits. Seven & i is taking steps to bolster its shares with a five-year, two-trillion-yen share buyback. So far, that has not done much, with the stock down about 7.8 per cent since the repurchase was announced on Mar 6. Some of the funding for that was due to come from an initial public offering of the US business, but Couche-Tard's exit has raised doubts over whether that plan will remain intact. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Further investor-friendly efforts will be harder to enact, given that Seven & i has already taken drastic steps to overhaul the business, according to Taku Sugawara, an analyst at Iwai Cosmo Securities. The operator of 7-Eleven stores is on track to sell its less-profitable retail operations in a deal that will close in September, part of the package of sweeping changes announced since Couche-Tard's approach. 'Obfuscation and delay' The Canadian group's campaign, which if successful would have been the biggest foreign takeover of a Japanese company, ended in acrimony. In a 1,500-word missive, Couche-Tard said Seven & i's founding Ito family had never been open to talks and blamed the board for a 'calculated campaign of obfuscation and delay'. Seven & i responded by saying it was disappointed by Couche-Tard's decision to walk away, and disagreed with what it called 'numerous mischaracterisations' in the letter. The remaining path for Seven & i is to pursue greater growth and profitability in the convenience stores business, which investors have been clamouring for. Two years ago, activist fund ValueAct Capital Management pushed for this strategy and unsuccessfully sought to replace Ryuichi Isaka, the prior CEO. One issue is Seven & i's underlying performance. While operating profit for the March-to-May period rose 9.7 per cent year on year to 65.1 billion yen, it was the second-lowest quarterly result in the past decade. Domestic same-store sales remained almost flat, lagging behind competitors. The US operations squeezed out profits thanks to cost-cutting measures, but revenue remains weak. 'We are closely watching how far Mr Dacus can go in supporting and managing improvements in performance,' said Takahiro Kazahaya, a senior analyst at UBS Securities. The CEO is due to give an update on Seven & i's turnaround strategy in August, with a focus on how he plans to improve the core convenience store business. Giving in Seven & i has a long history of enacting reforms under external pressure. In 2016, concerns raised by activist fund Third Point over executive appointments resulted in the exit of former chairman Toshifumi Suzuki and Isaka's appointment. ValueAct's pressure campaign helped fuel Seven & i's decision to sell its Sogo & Seibu department stores to Fortress Investment Group in 2022 for 250 billion yen. The latest reforms were accelerated by Couche-Tard's approach, according to Kazahaya. While Couche-Tard may have stepped away from the deal, its decision to provide a detailed explanation in a long letter may tempt other potential bidders, activist investors, or even rivals, to join the fray. One investor pointed out that the Canadian operator of Circle K stores could have issued a one-line statement, but chose instead to disclose details of its discussions with Seven & i, including the amount of the termination fee – US$1.2 billion – and alternate merger scenarios that were discussed. Artisan Partners Asset Management was especially vocal during Couche-Tard's campaign, pressing the company to engage more deeply with the Canadian retailer. In a letter sent to the company's directors in March, the US investment firm cited concerns around potential conflicts of interest and the board's 'failure to pursue the path that offers the best future for the company and maximises value'. Another possibility is the resurrection of a management buyout by Seven & i's founding Ito family. A nine-trillion-yen proposal to take the retailer private imploded in March after the buyout group, which included Itochu, failed to secure financing. The lacklustre share price also makes Seven & i a prime candidate to be taken private by insiders. BLOOMBERG
Business Recorder
16-07-2025
- Business
- Business Recorder
Nikkei edges higher amid tech rally
TOKYO: Japan's Nikkei share average nudged higher on Tuesday, as gains in technology stocks were partially tempered by caution ahead of local election results and US inflation data. The Nikkei was up 0.12% at 39,507.28 by the midday break. The index rose as much as 0.46% earlier in the session, buoyed by gains in Nasdaq futures during Asia trade. The US stock futures index advanced after AI chip giant Nvidia said it will resume sales of its H20 graphics processing unit (GPU) chips to China. The broader Topix edged 0.05% higher to 2,824.15. 'The Nasdaq's gains were a positive cue for the Nikkei, but the gains of the Nikkei were limited as the market awaited US price data and the outcome of the national election,' said Takamasa Ikeda, senior portfolio manager at GCI Asset Management. Global investors also await US consumer price data for June, due later in the day, and will monitor for any upward pressure on prices from tariffs. In Japan, markets are wary of a potential defeat for the Liberal Democratic Party and its coalition partner Komeito in the upcoming upper house election on July 20.
Business Recorder
15-07-2025
- Business
- Business Recorder
Japan's Nikkei edges higher amid tech rally, pre-data caution
TOKYO: Japan's Nikkei share average nudged higher on Tuesday, as gains in technology stocks were partially tempered by caution ahead of local election results and U.S. inflation data. The Nikkei was up 0.12% at 39,507.28 by the midday break. The index rose as much as 0.46% earlier in the session, buoyed by gains in Nasdaq futures during Asia trade. The U.S. stock futures index advanced after AI chip giant Nvidia said it will resume sales of its H20 graphics processing unit (GPU) chips to China. The broader Topix edged 0.05% higher to 2,824.15. 'The Nasdaq's gains were a positive cue for the Nikkei, but the gains of the Nikkei were limited as the market awaited U.S. price data and the outcome of the national election,' said Takamasa Ikeda, senior portfolio manager at GCI Asset Management. Nikkei falls for 3rd day as trade impasse Global investors also await U.S. consumer price data for June, due later in the day, and will monitor for any upward pressure on prices from tariffs. In Japan, markets are wary of a potential defeat for the Liberal Democratic Party and its coalition partner Komeito in the upcoming upper house election on July 20. A potential defeat could empower opposition parties that have pledged in their campaign platforms to cut or abolish the sales tax. Shares of chip-making equipment maker Tokyo Electron rose 1.72% to become the biggest source for the Nikkei's gains. Cable makers, which are the gauge for the data centre investments, jumped, with Furukawa Electric and Fujikura gaining 4.95% and 3.4%, respectively, to become the top percentage gainers in the Nikkei. Ryohin Keikaku, operator of the Muji retail brand, fell 4%, becoming the biggest drag on the Nikkei.
New Straits Times
15-07-2025
- Business
- New Straits Times
Japan's Nikkei edges higher amid tech rally, pre-data caution
TOKYO: Japan's Nikkei share average nudged higher on Tuesday, as gains in technology stocks were partially tempered by caution ahead of local election results and US inflation data. The Nikkei was up 0.12 per cent at 39,507.28 by the midday break. The index rose as much as 0.46 per cent earlier in the session, buoyed by gains in Nasdaq futures during Asia trade. The US stock futures index advanced after AI chip giant Nvidia said it will resume sales of its H20 graphics processing unit (GPU) chips to China. The broader Topix edged 0.05 per cent higher to 2,824.15. "The Nasdaq's gains were a positive cue for the Nikkei, but the gains of the Nikkei were limited as the market awaited US price data and the outcome of the national election," said Takamasa Ikeda, senior portfolio manager at GCI Asset Management. Global investors also await US consumer price data for June, due later in the day, and will monitor for any upward pressure on prices from tariffs. In Japan, markets are wary of a potential defeat for the Liberal Democratic Party and its coalition partner Komeito in the upcoming upper house election on July 20. A potential defeat could empower opposition parties that have pledged in their campaign platforms to cut or abolish the sales tax. Shares of chip-making equipment maker Tokyo Electron rose 1.72 per cent to become the biggest source for the Nikkei's gains. Cable makers, which are the gauge for the data centre investments, jumped, with Furukawa Electric and Fujikura gaining 4.95 per cent and 3.4 per cent, respectively, to become the top percentage gainers in the Nikkei. Ryohin Keikaku, operator of the Muji retail brand, fell 4 per cent, becoming the biggest drag on the Nikkei.
Yomiuri Shimbun
15-07-2025
- Business
- Yomiuri Shimbun
Japan's Nikkei Stock Average Edges Higher Amid Tech Rally, Pre-Data Caution
TOKYO, July 15 (Reuters) – Japan's Nikkei share average nudged higher on Tuesday, as gains in technology stocks were partially tempered by caution ahead of local election results and U.S. inflation data. The Nikkei .N225 was up 0.12% at 39,507.28 by the midday break. The index rose as much as 0.46% earlier in the session, buoyed by gains in Nasdaq futures NQc1 during Asia trade. The U.S. stock futures index advanced after AI chip giant NvidiaNVDA.O said it will resume sales of its H20 graphics processing unit (GPU) chips to China. The broader Topix .TOPX edged 0.05% higher to 2,824.15. 'The Nasdaq's gains were a positive cue for the Nikkei, but the gains of the Nikkei were limited as the market awaited U.S. price data and the outcome of the national election,' said Takamasa Ikeda, senior portfolio manager at GCI Asset Management. Global investors also await U.S. consumer price data for June, due later in the day, and will monitor for any upward pressure on prices from tariffs. In Japan, markets are wary of a potential defeat for the Liberal Democratic Party and its coalition partner Komeito in the upcoming upper house election on July 20. A potential defeat could empower opposition parties that have pledged in their campaign platforms to cut or abolish the sales tax. Shares of chip-making equipment maker Tokyo Electron rose 1.72% to become the biggest source for the Nikkei's gains. Cable makers, which are the gauge for the data center investments, jumped, with Furukawa Electric 5801.T and Fujikura 5803.T gaining 4.95% and 3.4%, respectively, to become the top percentage gainers in the Nikkei. Ryohin Keikaku 7453.T, operator of the Muji retail brand, fell 4%, becoming the biggest drag on the Nikkei.
