(Bloomberg) -- Seven & i Holdings Co. detailed plans to rename itself and shed dozens of non-core businesses, accelerating restructuring efforts as it tries to fend off a buyout proposal from Alimentation Couche-Tard Inc.
The Japanese retailer, which said its new tentative name will be 7-Eleven Corp., also cut its operating profit outlook for the 12 months through end-February to ¥403 billion ($2.7 billion) on weaker sales at convenience stores and spending on new initiatives. That compares with the prior forecast for ¥545 billion and analysts’ average projection of ¥524 billion.
The changes, announced alongside quarterly results, underscore Chief Executive Officer Ryuichi Isaka’s efforts to restructure the business in the face of an unsolicited ¥7 trillion takeover proposal from Couche-Tard, the Canadian operator of Circle-K stores. Seven & i had been under pressure from activists and other investors for years to narrow its focus on its crown jewel: 7-Eleven and other convenience stores.
The goal is to “unlock value for the company’s shareholders and other stakeholders,” Seven & i said in the statement.
Seven & i, which operates more than 85,000 stores across the globe, said in a statement it will set up a holding company for its supermarkets and other retail shops totaling 31 businesses. It may list the entity as it focuses more on convenience stores and plans to bring in strategic partners for the new unit.
An investor relations day is being planned for Oct. 24 to provide more details on the initiative, the company said.
The move comes after Canadian operator of Circle-K stores sent Seven & i a new potential acquisition price of ¥7 trillion last month, people with knowledge of the matter said earlier this week, reflecting Couche-Tard’s seriousness about the takeover. The indicated offer of $18.19 per share was sent to Seven & i on Sept. 19, a premium of around 20% from the prior offer.
Seven & i confirmed that it received a revised private proposal from Couche-Tard, and said it will act in the best interests of shareholders.
For the latest quarter that ended in August, Seven & i reported operating profit fell 20% to ¥128 billion, on net sales of ¥3.3 trillion. The retailer raised its sales forecast for the full year, to ¥11.9 trillion from ¥11.3 trillion.
Seven & i shares have climbed more than 30% since the Canadian company’s buyout interest became public, yet are still trading below Couche-Tard’s new indicated offer. Shares in the company fell less than 1% in Tokyo on Thursday.
(Updates with details of plan to create new holding company.)
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