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Japanese convenience retailer Seven & i Holdings slashed its earnings forecasts and announced plans to restructure by spinning off non-core businesses into a standalone subsidiary. The company revised its profit forecast for the fiscal year ending February 2025 to 163 billion yen, a 44.4% reduction from its previous projection. This decision follows first-half net profit of 52.24 billion yen on 6.04 trillion yen in revenue, with sales exceeding expectations but profits falling short. Seven & i cited decreased customer traffic at overseas convenience stores due to a more cautious approach to spending. Additionally, the company recorded a charge of 45.88 billion yen related to the spin-off of Ito-Yokado Online Supermarket.
In a separate filing, Seven & i announced plans to establish an intermediate holding company for its supermarket food business, specialty stores, and other entities, amid investor pressure to streamline its portfolio. This restructuring effort, which involves consolidating 31 units, comes as the company faces a takeover attempt by Canada’s Alimentation Couche-Tard. Seven & i previously rejected an initial takeover offer from Couche-Tard, citing concerns about shareholder interests and U.S. antitrust issues.
Regarding the revised offer from Couche-Tard, details were not disclosed, but reports suggest a 20% increase in the offer to $18.19 per share. If finalized, this deal could represent the largest foreign takeover of a Japanese company. Analysts speculate about the possibility of a hostile takeover attempt by Couche-Tard, considering the potential implications for Seven & i’s management and shareholders. Despite uncertainties surrounding the bid, Seven & i’s stock price has surged over 33% since the initial buyout interest was made public in August.
With over 16,800 stores globally, Couche-Tard lags behind Seven & i Holdings, which operates approximately 85,800 stores. The revised offer signals Couche-Tard’s commitment to the acquisition, offering a significant premium compared to pre-offer trading prices. While the financial aspect is crucial, other considerations come into play as both companies navigate negotiations. Amid the pressure to demonstrate independence and efficient operations, Seven & i faces a strategic decision on its future path in the face of the revised takeover offer.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.
