7-Eleven Parent Selects Loeb-Backed Candidate as Next President
April 15 2016 - 9:00AM
Dow Jones News
TOKYO—The parent of 7-Eleven said Friday its nomination
committee selected the preferred candidate of activist investor
Daniel Loeb as its next president, likely concluding a power
struggle that burst into the open this month when the company's
longtime chief executive abruptly quit.
Tokyo-based Seven & i Holdings Co. said the committee picked
Ryuichi Isaka, 58 years old, who has helped fuel growth at 7-Eleven
convenience stores, to lead the holding company. The decision comes
after the resignation of 83-year-old Chairman and Chief Executive
Toshifumi Suzuki, who had reigned over the retail empire for nearly
a quarter-century.
Mr. Isaka would succeed company President Noritoshi Murata, who
is also resigning.
The selection was a rare victory for a U.S. activist investor in
Japan and followed a public campaign by Mr. Loeb against a plan by
Mr. Suzuki to oust Mr. Isaka from the company's top ranks. Mr.
Suzuki's plan was defeated by the board on April 7, falling one
vote short of a majority among the 15 directors. He resigned
following the vote.
Mr. Loeb, who has said his hedge fund Third Point LLC owns
hundreds of millions of dollars in Seven & i Holdings common
shares, praised Mr. Isaka in a March 27 letter to the board, saying
he was a natural candidate to lead the holding company.
"Mr. Isaka has been instrumental to the success of Seven-Eleven
Japan, which is the group's core business," Mr. Loeb wrote in the
letter. He said the successor to Mr. Suzuki should "have a vision
to profitably grow the 7-Eleven store network in Japan, North
America and other countries."
The nomination committee's choice still needs approval from the
board Tuesday and final backing from shareholders when they meet in
May. But the committee included a former opponent of Mr. Isaka,
suggesting that consensus might have been reached.
Mr. Suzuki had earlier questioned Mr. Isaka's ability to lead
the company and said he resigned to take responsibility for his
failure to persuade a majority of the board to go along with his
plan.
The likely elevation of Mr. Isaka will leave strategic
challenges for the retailer, which combines a growing and
profitable global 7-Eleven convenience-store business with less
successful businesses including a money-losing big-box retailer in
Japan called Ito-Yokado.
Under Mr. Suzuki, the company aggressively acquired other
retailers including one, Millennium Retailing Inc., that operates
higher-end Japanese department stores Sogo and Seibu. Mr. Loeb
criticized the strategy, pushing Seven & i Holdings to shed
Ito-Yokado and focus on convenience stores.
Analysts said Mr. Suzuki's exit was likely to accelerate
restructuring. His resignation could mean a shift toward "more
selective business portfolio management," said Nomura Securities
analyst Masafumi Shoda. In March, the company said that it would
close some unprofitable supermarkets and department stores.
SMBC Nikko Securities analyst Yoshiyuki Namiki said he expected
the new leadership to foster broader decision-making and give
managers more leeway compared with Mr. Suzuki, who was known for a
top-down style that included taste-testing new varieties of
"onigiri" rice balls before they went on sale at 7-Eleven stores in
Japan.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com
(END) Dow Jones Newswires
April 15, 2016 08:45 ET (12:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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