(Bloomberg)-A SEVEN & I Holdings shareholder-Japanese 7-Eleven Market Network operator-is pressuring the company to get involved “deeper” with food couche-Tard compared to its $ 47.5 billion purchase proposal.
“The council has made several decisions that leave significant questions unanswered,” said Artisan Partners Asset Management portfolio managers, N. David Samra and Benjamin L. Herrick, in a letter to Seven & I on Sunday. The resource manager has approximately 1% stakes in both the company and Coupche-Tard, according to data compiled by Bloomberg.
“These questions revolve around potential conflicts of interest and the failure to follow the path that offers the best future for the company and maximizes the value,” they said. Seven & I could not be contacted immediately to comment outside regular business hours.
COUCHE-TARD, Canadian operator of convenience stores and gas stations that has the Circle K brand ,.
Seven & I has been advocated from the approach by seeking a company reformulation to unlock the value for shareholders. Last week, he announced comprehensive changes, including the appointment of Stephen Dacus, the board’s director, as CEO, the sale of his $ 5.4 billion hypermarket business, a stock repurchase program worth ¥ 2 trillion ($ 13.5 billion) and a list of his US business.
The Artisan Partners, which has been encouraging negotiations between the two parties for months, said there are “serious questions” about Dacus’s role as president of the special committee that supervises the couche-Tard offer, and that he acted on the appointment committee “while his own role in the company was under consideration.”
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“Minimum standards” of corporate governance would have required Dacus to renounce both committees, the investor said.
“Shareholders may not have confidence that the Special Committee has conducted, or continues to conduct a thorough assessment process,” said Artisan Partners, adding that the company will probably vote against Dacus and other board members in the next annual general meeting, depending on Seven & I answers.
Japanese and Canadian retailers said in separate statements last week they were working together on potential US stores selling antitrust obstacles if an acquisition becomes the best option.
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Investors are not yet convinced, with Seven & I stock price negotiating more than 20% below the couche-Tard offer. Artisan stated that “given the company’s weak performance in North America, we as shareholders again encourage the special committee to be fully and significantly involved with COUCHE-TARD, a company with a proven history of operational excellence.”
Bloomberg News reported that COUCHE-TARD has not yet signed a non-disclosure agreement that would give the Canadian company access to detailed financial information that its advice believes to be necessary to make a formal binding offer, a common step in such negotiations.
COUCHE-TARD executives, including founder and president Alain Bouchard, will visit Tokyo this week to try to advance the discussions with Seven & I, and are also planning to hold a press conference on March 13 to publicly present their case for the purchase of the company.
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