The owner of the 7-Eleven convenience chain, Seven & i Holdings, said that shares in the business hit a two-year high after Reuters reported activist investor ValueAct Capital took a stake in the Japanese business, signalling a potential shake-up at the retail giant.
"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.
According to Reuters, ValueAct amassed a 4.4% stake in Seven & i and believes the sum of its parts is worth much more than its current market value, the fund told investors in a letter seen by Reuters.
Share Price Surge
Seven & i shares surged to as high as 7.3% in morning trading, compared with a 2% fall of the benchmark Nikkei stock average.
Seven & i became the latest in a growing list of Japanese companies to face pressure from investment funds. Shareholder activism is booming in Japan, driven by a government push to provide higher returns to investors.
San Francisco-based ValueAct has had some notable success in Japan, where companies traditionally have been wary of activist investors.
One of the fund's partners, Robert Hale, joined the board of Olympus Corp in 2019. Shares in the maker of endoscopes have nearly trebled since early 2019.
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.