Seven & I Holdings Co., Ltd. (OTC:SVNDF) (OTC:SVNDY) is contemplating a potential listing of Ito-Yokado as it seeks to separate it from its more lucrative 7-Eleven franchise.
The company plans to create a globally integrated CVS management structure, including Japan and North America, with a unified leadership.
The Superstore (SST) business will aim to establish a refined management/business structure to provide employees with autonomy to pursue re-growth.
The retailer's board and strategic committee will devise a plan for the separation and public offering of the legacy operation.
In response to pressure from ValueAct Capital Management last year, Seven & I has initiated steps towards improving its valuation and embracing structural reform, reported Bloomberg.
This includes potential store closures to boost performance. The reorganization aims to grant employees autonomy in driving growth and strategic decision-making.
Previously, Seven & I had announced a collaboration with its supermarket unit to diversify product offerings in its larger convenience stores.
The company has also disclosed plans for share buybacks and a stock split. In its latest fiscal year, Seven & I recorded a 5.5% increase in operating profit despite a slight decline in net sales. The company's outlook for the current year slightly trails analysts' projections, as per the report.
CEO Ryuichi Isaka addressed investor concerns earlier this year, emphasizing the need to replicate the success of 7-Eleven Japan's food business globally.
As per the report, Seven & I has pushed back against calls for breakup, arguing it would harm shareholder value.
The status of ValueAct's stake remains uncertain, with the investor no longer listed as a significant shareholder. However, it's plausible that ValueAct still holds an indirect stake in the company, the report further noted.
Price Action: SVNDF shares traded lower by 1.81% at $14.33 on Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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