(Adds Seven & i response)
TOKYO, May 13 (Reuters) – Seven & i Holdings shares surged almost 7% to a two-year high after it became a target of activist investor ValueAct Capital, which said the Japanese owner of the 7-Eleven convenience store chain was undervalued.
ValueAct has amassed a $1.53 billion, or 4.4%, stake in Seven & i and wants the Japanese owner of the 7-Eleven convenience store chain to consider changes, including a potential break-up, Reuters reported.
“We refrain from commenting on individual shareholders’ matters. Not only in this case, but also in the future, we will continue to engage in dialogue with our shareholders,” Seven & i said in an emailed statement when asked for a comment.
Seven & i has joined a number of Japanese companies that have been put under pressure by investment funds. Shareholder activism is booming in Japan, driven by a government push to provide higher returns to investors.
ValueAct told its investors on Wednesday in a letter seen by Reuters that it built a 4.4% stake in Seven & i and believes that the sum of its parts is worth much more than its current market value.
The hedge fund said the 7-Eleven business could be worth more than double what its parent is currently valued at if the company restructures itself to focus on the convenience stores or if 7-Eleven is spun out.
Seven & i shares surged 6.8% in early trading, compared with a 1.77% fall of the benchmark Nikkei stock average. (Reporting by Junko Fujita; Editing by Muralikumar Anantharaman)
