Seven & i Holdings, the parent company of 7-Eleven, has recently announced significant changes to its earnings forecast and corporate structure in an effort to drive growth and streamline operations. The company has revised its profit forecast for the fiscal year ending February 2025, now expecting a net income of 163 billion yen, a 44.4% reduction from its previous projection of 293 billion yen.
The decision to adjust its earnings forecast comes after Seven & i reported first-half net profit of 52.24 billion yen on 6.04 trillion yen in revenue, with profits falling significantly below its own guidance. The company attributed this discrepancy to a decrease in customers at its overseas convenience stores, as consumers adopted a more cautious approach to spending.
In addition to revising its earnings forecast, Seven & i announced plans to restructure its business by spinning off non-core operations into a separate subsidiary. This restructuring will consolidate 31 units under an intermediate holding company, focusing on the supermarket food business, specialty stores, and other ventures. These changes come amidst pressure from investors to streamline the company’s portfolio and drive long-term growth.
The restructuring efforts coincide with Seven & i’s rejection of a takeover bid from Canada’s Alimentation Couche-Tard. Despite the rejection of the initial offer, Seven & i confirmed that it received a revised bid from ACT, although specific details were not disclosed. The revised offer, reportedly around $18.19 per share, represents a significant increase from the original bid and could potentially lead to the largest foreign takeover of a Japanese company.
While the revised offer has garnered attention, experts are divided on the likelihood of a successful takeover. Some speculate that a hostile takeover attempt may be on the horizon, while others believe that the pressure is on Seven & i management to demonstrate the company’s ability to stand independently. Shareholders and activists may play a pivotal role in influencing the outcome of the acquisition bid, as frustrations mount over the lack of progress in negotiations.
Despite the uncertainty surrounding the potential takeover, Seven & i shares have experienced significant volatility in the market, with prices surging over 33% since the buyout interest was first announced. As the situation continues to evolve, stakeholders and industry analysts will closely monitor developments to gauge the future direction of Seven & i Holdings and its iconic 7-Eleven brand.
