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🇸🇬 Singapore /Economy & Trade

Seven & i shares jump 3% on Zabka convenience store stake talks

From CNA · () English

Summarized and contextualized by DistantNews.

At a glance

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  • Seven & i Holdings shares rose 3% in Tokyo on Friday amid talks to buy a stake in Polish convenience store operator Zabka Group.
  • The potential acquisition, likely worth several billion dollars, would expand Seven & i's presence into Eastern Europe.
  • The move comes as Seven & i seeks growth under CEO Stephen Dacus and faces pressure to improve flagging business after a prior takeover attempt.

Shares in Japanese retailer Seven & i Holdings climbed 3% in Tokyo on Friday as the company confirmed it is in talks to acquire a stake in Polish convenience store operator Zabka Group. The owner of 7-Eleven is considering purchasing shares held by funds, with the investment potentially reaching several billion dollars, according to Nikkei.

Amid overall market weakness due to falling semiconductor stocks, defensive sectors centered on domestic demand are being bought.

— Naoshi MatsumotoAn analyst at Yamawa Securities commenting on market trends affecting Seven & i's stock performance.

This potential deal would extend Seven & i's reach into Eastern Europe, adding to its established presence in Japan and North America. The expansion aligns with the company's strategy under CEO Stephen Dacus to grow its business. The move also follows Seven & i's acquisition of Speedway petrol stations in the U.S. in 2021 and its positioning of Europe as a "fourth pillar of growth."

Europe has been positioned as a "fourth pillar of growth".

— Seven & i HoldingsDescribing the company's strategic focus for expansion.

The Japanese retailer has faced challenges in improving its business performance, including a previous takeover bid from Canadian rival Alimentation Couche-Tard. Seven & i has also been under pressure from investors due to lackluster returns and has been urged to focus on its core convenience store operations, leading to the sale of its supermarket business last year.

A partnership reflects "a history of digital defeat" and amounts to Seven & i "buying takeover defense with shareholders' money."

— Bernstein analystsCommenting on potential investments from SoftBank Corp and PayPay.

Separately, SoftBank Corp and PayPay are reportedly in talks to invest in Seven & i, with Sumitomo Mitsui Card also potentially taking a stake. Analysts at Bernstein noted that such partnerships might reflect "a history of digital defeat" and could be viewed as Seven & i "buying takeover defense with shareholders' money," aimed at "plugging its largest remaining weakness with outside capital and installing friendly shareholders as a takeover countermeasure."

"Seven is plugging its largest remaining weakness with outside capital and installing friendly shareholders as a takeover countermeasure."

— Bernstein analystsFurther analysis on the strategic implications of potential investments.
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Originally published by CNA. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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