(Bloomberg) -- An investor in Seven & i Holdings Co. has urged the company to engage with suitor Alimentation Couche-Tard Inc. and provide an update on the buyout bid by next month, citing the “poor track record” of the Japanese operator of 7-Eleven stores in creating value for shareholders.
US-based asset manager Artisan Partners asked Seven & i to brief shareholders on the status of takeover negotiations by Sept. 19 in a letter sent to the board on Friday, warning the company will be “held accountable” if it doesn’t open negotiations. Artisan’s portfolio managers David Samra and Ben Herrick cited the “historic implications” of a bid that could represent the biggest takeover of a Japanese company by a foreign suitor.
Couche-Tard was “uniquely positioned” to enhance shareholder value and negotiating with the company would be “the best tactic to preserve positive stakeholder outcomes in Japan,” Samra and Herrick said in the letter.
The Canadian operator of Circle K hasn’t disclosed terms or a price for its proposed buyout of Seven & i, which currently has a market value of 5.47 trillion yen ($37 billion).
The investors, whose clients currently own over 1% of the company’s shares, also criticized potential government intervention, saying it would run counter to recent reforms aimed at stimulating M&A activity. “It would be unfortunate for the Japanese economy and capital markets to discredit so much of what recently pushed the Japanese equity markets to an all-time high,” they wrote.
The Japanese convenience store giant is seeking government protection through a designation as a “core” company under the Foreign Exchange and Foreign Trade Act, an upgrade that would require prior notification to the government of any purchase of its shares above 10%, Bloomberg reported this week.
“Given the company’s poor track record of value creation, we encourage you to take this opportunity to prioritize shareholders,” Samra and Herrick said.
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