The operator of 7-Eleven stores, Seven & I Holdings Co., may once again become a buyout target if its latest turnaround efforts fall short. This comes after Canadian convenience store giant Alimentation Couche-Tard withdrew its takeover proposal earlier this week, and Seven & I’s shares have fallen over 20% year-to-date.
New CEO Stephen Dacus is under growing pressure to prove that his reform strategy can deliver results, particularly in core markets like the U.S. and Japan, where rising costs and soft consumer demand are squeezing margins.
7-Eleven – CEO Stephen Dacus
To support its share price, Seven & I has committed to a ¥2 trillion share buyback over five years. However, the stock has continued to slide — down nearly 8% since the buyback was announced in March. Part of the funding was expected to come from a U.S. unit IPO, but Couche-Tard’s departure has cast doubt on that plan.
Analysts say further shareholder-friendly moves will be difficult, as the company has already undertaken major restructuring, including the planned sale of underperforming retail businesses by September. These were part of broader reforms triggered by Couche-Tard’s interest.
The failed takeover, which would have been Japan’s largest foreign buyout, ended on a bitter note. Couche-Tard accused the company’s founding Ito family and board of stalling discussions, while Seven & I said it was disappointed by the withdrawal and disputed many of the claims.
Now, the company’s focus turns to improving performance in its core convenience store segment — something investors have long pushed for. Two years ago, activist fund ValueAct tried but failed to replace former CEO Ryuichi Isaka, urging a stronger focus on the convenience business.
Seven & I’s latest earnings show challenges remain. Operating profit rose nearly 10% year-on-year to ¥65.1 billion for the March–May period, but it was still the second-lowest quarterly result in a decade. Domestic same-store sales barely moved, and while the U.S. unit remained profitable through cost cuts, revenue remained soft.
Investors will be closely watching Dacus’s upcoming strategy update in August, where he’s expected to outline how he plans to strengthen the core business.
The company has a history of reform under investor pressure. Activist interventions in 2016 and 2022 led to major leadership changes and divestments, including the sale of Sogo & Seibu to Fortress Investment Group. Analysts say Couche-Tard’s involvement accelerated the latest changes.
Even though the Canadian firm has exited, its unusually detailed breakup letter — which disclosed discussions, termination fees, and alternative deal options — may spark interest from other potential buyers or activists.
One possibility is a revival of a management-led buyout. A ¥9 trillion proposal involving the Ito family and Itochu fell through in March due to financing issues. But with the stock price under pressure, the door remains open for insiders to make another move to take the company private.
