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(Bloomberg) -- Seven & i Holdings Co. said it’s engaging with Alimentation Couche-Tard Inc. on ways to ease antitrust concerns over a potential combination of the retailers while denying conflict-of-interest allegations raised by a major shareholder.
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Couche-Tard, the Canadian convenience store and gas station operator that owns the Circle K brand, proposed last year to purchase Seven & i for $18.19 per share, but hasn’t been able to enter negotiations with the Japanese company.
The operator of 7-Eleven stores has been fending off the $47.5 billion buyout approach by pursuing an overhaul of the company to unlock shareholder value. It announced last week sweeping changes, including board director Stephen Dacus taking over as chief executive officer, the sale of its superstore business for $5.4 billion, a share buyback program worth ¥2 trillion ($13.5 billion) and a listing of its US business.
“The Board has taken several decisions that leave significant unanswered questions,” Artisan portfolio managers N. David Samra and Benjamin L. Herrick wrote in a letter to Seven & i’s board on Sunday. “Those questions revolve around potential conflicts of interest and failure to pursue the path that offers the best future for the company and maximizes value.”
The money manager owns stakes of roughly 1% in both the company and Couche-Tard, according to data compiled by Bloomberg.
Artisan Partners Asset Management Inc., which has for months been urging negotiations between the two parties, said there are “serious questions” about Dacus’ role as chairman of the special committee overseeing Couche-Tard’s bid, and as he served on the nomination committee “while his own role at the company was under consideration.”
“Minimum” corporate governance standards would have demanded that Dacus resign from both of these committees, the investor said.
Dacus was chosen through a search process that began in 2023, Seven & i responded in a letter issued Monday. He removed himself from nomination committee deliberations once it became clear in December that he was a candidate for the top job to avoid any conflicts of interest, the company said.
“Shareholders can have no confidence that the special committee has run, nor continues to run, a thorough evaluation process,” said Artisan Partners, adding that the firm is likely to vote against Dacus and other board members at the next annual general meeting, depending on Seven & i’s answers.