TOKYO - Seven & i Holdings, the Japanese operator of the 7-Eleven convenience store chain, is expected to announce on Thursday a change of CEO and plans to restructure its business, sources said, as it faces a $47 billion foreign takeover bid.

Lead outside director Stephen Dacus will likely succeed Ryuichi Isaka as chief executive at Seven & i, sources have told Reuters, putting a foreign executive in charge of the Japanese company for the first time.

The retail conglomerate also plans to announce a share buyback of about 2 trillion yen ($13.4 billion), Bloomberg News reported.

Seven & i's stock surged as much as 10% on Thursday after the report on the share buyback.

The company did not immediately respond to a request for comment on any impending management changes or business announcements. The sources did not wish to be identified because they were not authorised to speak on the matter.

Seven & i, which has more than 80,000 7-Eleven stores in 20 countries and regions, will hold a board meeting and then announce the leadership change along with plans including the sale of non-core assets to Bain Capital, sources said.

The company has been the target of investor criticism over its capital allocation for years, and in August received a buyout offer from Circle-K operator Alimentation Couche-Tard that was ultimately raised to $47 billion, a 35% premium to its current market capitalisation.

In response, a group led by Seven & i's founding Ito family mounted its own buyout offer, while the company's management said they could chart an independent path to recovery.

Dacus, who previously held executive roles with Walmart and Fast Retailing, has also led a special committee vetting the takeover bids. The Ito family group failed to secure a reported $58 billion in funding for their offer, scuttling the deal late last month.

Dacus is set to be replaced as head of the special committee by another outside director, Paul Yonamine, the Nikkei reported on Monday.

FOREIGN INVESTORS CRITICISED ISAKA REIGN

Shares of Seven & i plunged on Tuesday following a report it planned to reject the Couche-Tard offer, although the Japanese company said it was still considering the bid.

Seven & i is likely to sell most of its non-core business to Bain Capital for more than 700 billion yen ($4.7 billion), Bloomberg reported on Wednesday, citing people familiar with the matter.

Isaka has been with the 7-Eleven operator since 1980, becoming its president in 2016. But his reign has been criticised by foreign investors, including ValueAct Capital, which tried to oust him in 2023 for pursuing what it said was a flawed strategy.

More recently, U.S.-based Artisan Partners urged the company to consider a competitive bidding process for takeover proposals.

Isaka laid out an independent turnaround plan in October, aiming to roughly double sales to 30 trillion yen by 2030 by expanding overseas and focusing on fresh-food offerings.

If Couche-Tard succeeds in winning control of Seven & i, it would be the biggest foreign takeover of a Japanese company.

Seven & i was classified as "core" to Japan's national security in September, although the finance ministry said at the time it would not create hurdles for a takeover. ($1 = 149.23 yen) (Reporting by Ritsuko Shimizu and Rocky Swift; Editing by Muralikumar Anantharaman)


Reuters