7-Eleven led the shareholders to a joyful dance

Reuter

Shoppers walk out of 7 & I Holdings' 7-11 convenience store in Tokyo

Convenience store operator Seven & i is putting on a great show. The $46 billion Japanese company confirmed in a passionate letter that its outside directors would form a committee to consider the management strategy, seek advice from shareholders on issues raised by its 4.4 percent shareholder, ValueAct Capital, and hint that it might even adopt some of the fund's ideas. However, it also argues that the radicals' plans do not create any strategic value, and that it reads like Kabuki, a Japanese dance drama rich in performance techniques.

Over the past year, ValueAct has lobbied the company privately, pushing executives to sell and divest underperforming businesses and focus on growing its best-known global storefront brand. Seven &i's inadequate response prompted it to write an open letter to the board last month, an unusual move for the San Francisco-based fund.

Seven & i's share price rebounded more from the pandemic-triggered July 2020 lows, but its five-year total return trailed a third of Circle-K's owner, Alimentation Couche-Tard. Its latest performance doesn't solve this problem, or ValueAct's growing frustration.