Seven & I Holdings (hereafter Seven & I), which operates the convenience store brand 7-Eleven, has welcomed its first foreign president since its establishment. Amid a management crisis, Seven & I is preparing for reform through a large-scale stock buyback and plans for an initial public offering (IPO) for its North American subsidiary. This is seen as a determination to solidify its independent path amid acquisition proposals from competitors. Whether Seven & I can maintain control depends on whether it can raise its stock price above the acquisition price proposed by competitors.
According to Nikkei on the 7th (local time), Seven & I announced at a press conference on the 6th that it will appoint Stephen Hayes Dakers, an outside director, as the new president and Chief Executive Officer (CEO). Dakers is expected to assume office after receiving approval at the regular shareholders' meeting scheduled for May 27. Current president Ryuichi Isaka explained that 7-Eleven has decided to undergo system reform to leap into a new stage as a 'global convenience store.'
The new CEO Dakers is a distribution expert who has worked for Japan's SPA fashion brand 'Uniqlo,' operated by Fast Retailing, and Walmart in the United States. Isaka, who has just over two months left in his term, is expected to serve as a special advisor.
Additionally, Seven & I has agreed to sell its superstore business sector to Bain Capital for 814.7 billion yen (approximately 8 trillion won), and it will also sell ownership of 'Seven Bank,' a 100% subsidiary of Seven & I.
Seven & I also stated that it plans to IPO its 100% subsidiary '7-Eleven, U.S.A. (SEI)' within 2026. According to Nikkei, SEI accounts for about half of 7-Eleven's total performance and is a key subsidiary. Through the IPO of its North American subsidiary, Seven & I plans to enhance the management independence of its subsidiaries and promote performance improvement. SEI's corporate value is estimated at 5 trillion yen (approximately 49 trillion won), and Seven & I is likely to sell part of its equity.
Most of the funds raised are expected to be used for stock buybacks. Seven & I plans to purchase its own shares worth 2 trillion yen (approximately 19.5 trillion won) by 2030 for shareholder return, which accounts for 40% of its market capitalization. Previously, Toyota and Honda conducted stock buybacks exceeding 1 trillion yen, but this would far exceed those amounts, making it the largest of its kind in history.
In addition, Seven & I plans to strengthen its shareholder return policies by gradually introducing systems to increase dividends.
The reason Seven & I has embarked on management reform and financing, strengthening its shareholder return policies through these means, is to prevent acquisition attempts by competitors. According to Nikkei, Seven & I has received an acquisition proposal from Canadian retailer Alimentation Couche-Tard at $18.19 (approximately 26,299 won) per share. Couche-Tard is a competitor of 7-Eleven, operating convenience stores primarily in North America and Europe.
On the 6th, Seven & I's stock closed at $13.66 (approximately 19,763 won), lower than Couche-Tard's proposed acquisition price of $18.19 (approximately 26,299 won). Stock buybacks are a typical shareholder return strategy that can effectively increase stock prices. If 7-Eleven's stock price rises above the acquisition price, it will be able to defend itself against Couche-Tard's acquisition proposal.
Following the previous day's announcement, Seven & I's stock surged over 8% within a day, reaching $14.77 as of 11 a.m. (Korean time). However, to raise the stock price above Couche-Tard's proposed acquisition price, it needs to increase by more than 23% from that point.