Shareholders of Japan’s Seven & i Holdings Co Ltd have voted down all four of the board candidates nominated by ValueAct Capital, a U.S. investment firm. ValueAct, which owns 4.4% of the company, had called for President Ryuichi Isaka to be among those replaced with its candidates. However, Isaka and other candidates backed by the company were all elected at the annual shareholders meeting.
ValueAct had urged the company to undertake a strategic review and consider spinning off its 7-Eleven chain or selling the entire company. The company in response elected to close additional supermarket stores in Japan and fully exit its apparel business. ValueAct fund has built its image as a constructive activist following successful engagement at medical equipment maker Olympus Corp and chip materials maker JSR Corp.
The focus now shifts to details of the vote, which are expected to be available later on Thursday. A large portion – about 10% – of the company is still owned by the founding family and the presence of activist investors is small. As such, support of more than 30% for ValueAct candidates would be significant, investors say.