Seven & i CEO Expected to Step Down as Management Buyout Fails, Couche-Tard Takeover Gains Traction

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7-Eleven parent Seven & i Holdings Co. Ltd. is moving ahead with a plan for its CEO, Ryuichi Isaka, to step down, to be replaced by Stephen Dacus, according to a Nikkei Asia report. Dacus would be the global retailer’s first foreign top executive. The move comes as a management buyout meant to head off a takeover attempt by rival global convenience-store retailer Alimentation Couche-Tard has fallen apart, and as Couche-Tard is looking at opening a Japan office.

Seven & i has not confirmed the report. In a “notice regarding media reports on the company’s management” posted on its website, the Tokyo-based retailer said, “There have been reports in some news media regarding the management of Seven & i; however, this information was not announced by the company and no decision has been made by the company at this time.”

Dacus, an outside director since 2022, heads a special committee tasked with evaluating the $47 billion takeover bid from Laval, Quebec-based Alimentation Couche-Tard and a deal from Seven & i’s founding family to take the company private.

The company will hold a board meeting on Thursday to make the final decision, according to a Reuters report citing two sources familiar with the situation, who declined to be named because of the sensitivity of the matter.

Dacus will be replaced as head of the special committee by another outside director, Paul Yonamine, Nikkei said.

Isaka has been with Seven & i since 1980, becoming president in 2016. But his tenure has been criticized by foreign investors, including ValueAct Capital, which tried to oust him in 2023 for pursuing a “flawed strategy,” according to reports.

Trading company Itochu Corp. last week withdrawing from a management buyout of Seven & i proposed by the retailer’s founding family. After receiving an acquisition proposal from Alimentation Couche-Tard in August, Seven & i’s founding Ito family began talks to take the company private for an estimated $58 billion. Itochu had considered investing $6.69 billion in the deal.

“Seven & i remains committed to exploring all opportunities to unlock value for shareholders and continues to assess a full range of strategic alternatives, including the proposal from Alimentation Couche-Tard Inc. The special committee is engaging constructively with [Alimentation Couche-Tard] to determine if an actionable proposal can be achieved that addresses the serious U.S. antitrust challenges that any such transaction would face,” Seven & i said following the management buyout’s failure.

“Couche-Tard remains committed to reaching a mutually agreeable transaction that benefits both companies’ customers, employees, franchisees and shareholders, creating a global retail champion,” a spokesperson for Alimentation Couche-Tard said in a statement provided to CSP in response to the buyout falling apart. “Since the public disclosure of our proposal over six months ago, we have engaged many stakeholders in Japan over multiple visits, and we appreciate their ongoing support. We continue to affirm our intention to maintain Seven & i’s role as an important part of Japan’s emergency response infrastructure, protect the privacy and security of customers, successfully address the regulatory approvals process and invest in the growth of the business. We look forward to working constructively with Seven & i to reach a friendly agreement.”

Alimentation Couche-Tard spends a lot of time in markets before it enters them. When thinking about a transaction, it spends a lot of time in the market getting to know it and understanding the cultural dynamics, with its people on the ground and in stores. beyond hotels, Couche-Tard doesn’t have a space where its executives can operate from in Japan. It has registered a local entity to look into establishing an office in Japan, a person familiar with the company’s process told CSP. It is not yet leased any office space, nor has it begun looking, the person said.

Meanwhile, Seven & i is seeking deals in Europe to bolster growth abroad, according to a Bloomberg report. The company does business in 20 countries and regions, and aims to add 10 more nations by fiscal 2030, while tripling sales to $200 billion, said the report. 

Seven & i already has stores in Scandinavia and plans to expand into the rest of Europe by investing in local companies, Ken Wakabayashi, CEO of 7-Eleven International LLC, the division responsible for global markets outside North America and Japan, told the news agency.

• 7-Eleven is No. 1 on CSP’s 2024 Top 202 ranking of U.S. c-store chains by store count. Alimentation Couche-Tard is No. 2.

Seven & i operates convenience stores, superstores, supermarkets, specialty stores, foodservices, financial services and IT services. Irving, Texas-based 7-Eleven Inc. operates, franchises or licenses more than 83,000 convenience stores in 19 countries and regions, including more than 13,000 7-Eleven convenience stores in the United States and Canada.

Alimentation Couche-Tard operates in 31 countries and territories, with more than 16,700 stores. Its network includes more than 7,100 stores in the United States, primarily under the Circle K banner.

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Greg Lindenberg has been covering convenience-store news and writing about the c-store and gas station industries for more than a quarter of a century. He specializes in mergers-and-acquisitions (M&A) news.

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