ValueAct urges ouster of Seven & i President Isaka – letter

By Svea Herbst-Bayliss

NEW YORK (Reuters) – ValueAct Capital is pushing to oust Seven & i Holdings President Ryuichi Isaka, saying he is responsible for a “flawed strategy” and stating publicly for the first time that he is one of four directors it wants to replace at next month’s annual meeting.

The San Francisco-based investment firm, which owns a 4.4% stake in the convenience store operator, is ratcheting up the pressure by saying publicly that Isaka has acted in bad faith since becoming president in 2016.

“It is time to find a new President for Seven & i,” ValueAct wrote to Seven & i shareholders in a letter dated April 20. The letter also criticizes the board for having failed to conduct a succession review for Isaka.

ValueAct said Seven & i recorded meetings with its team without its consent, violating privacy laws around the world. Then it leaked audio from a March 15 meeting to a news outlet, the investment firm said.

Seven & i did not immediately respond to a request for comment and ValueAct declined to comment beyond the contents of the letter.

ValueAct has long been critical of the company’s conglomerate structure, calling for a spin-off of the 7-Eleven convenience store chain or for a sale of the entire company.

Seven & i earlier this week said its board will oppose all director candidates nominated by ValueAct, including Dene Rogers (NYSE:), a former executive at RadioShack and Sears, and Brittni Levinson, ValueAct’s sustainability chief.

Tensions have escalated for weeks and a number of large investors backed ValueAct’s push for the company to explain its corporate structure and answer a series of questions during its earnings call earlier this month.

This week the company called ValueAct’s spin-off proposals “short-sighted” and “based on superficial understanding” of its businesses, while stressing various steps it has taken such as the divestiture of the department store business.