Seven & i boss survives shareholder activist bid to oust him

Shareholders of Japanese retail giant Seven & i Holdings have voted down a proposal from a US activist fund to replace its president.

Seven & i held its annual shareholder meeting in Tokyo on Thursday. The agenda included the proposal by ValueAct Capital Management, which owns a stake in the company.

The activist fund has called for the retailer to spin off its underperforming supermarket business including Ito Yokado. ValueAct wants it to focus on its core 7-Eleven convenience store chain.

Seven & i rejected the request, prompting ValueAct to seek the removal of executives. It sought to replace four directors, including President Isaka Ryuichi, with its own nominees.
Isaka told shareholders that the company's own proposal is the most effective way to promote the group's growth. He believes its competitive advantage lies in food products.

Shareholders approved Seven & i's motions to keep the current directors in their posts. But only about 76 percent voted for Isaka to be re-appointed as director. That's nearly 20 points lower than last year.

A shareholder who favored Isaka's re-appointment said the company's executives are proceeding steadily and the company's share price is rising gradually. He added, "I have no complaints as stockholder."

Another shareholder who opposed the re-appointment said the activist fund's proposal represents a reasonable way for 7-Eleven stores to generate more profit.

Seven & i Holdings is the first Japanese retailer to top annual sales of more than 10 trillion yen, or about 72 billion dollars.

Most profit came from its 7-Eleven convenience stores. The Ito Yokado supermarket chain posted a net loss for the third straight year in the last business year.