Seven & i said to plan large-scale share buyback
Bain Capital is nearing a deal to buy Seven & i’s supermarket business in a transaction that could be announced as soon as this week
SEVEN & i Holdings is planning a large-scale share buyback to boost its valuation, according to sources familiar with the matter. The stock surged.
The board will vote on the buyback plan at a meeting to be held later Thursday (Mar 6), said the sources who asked not to be named as the information is private. The buyback would amount to about two trillion yen (S$13.4 billion), one of the sources said.
Shares of Seven & i jumped as much as 10 per cent in Tokyo trading on the buyback plan, the most intraday since Nov 20, valuing the company at 5.7 trillion yen. Before today, the stock had dropped 20 per cent this year, piling pressure on the company to overhaul operations to increase shareholder value.
The company, which is the target of a takeover approach by Alimentation Couche-Tard, saw its valuation erode after a plan by the founding Ito family to take the company private collapsed last month. The news of the buyback, for now, checked the decline, with market capitalisation earlier dropping to around 5.3 trillion yen – close to wiping off gains that followed Couche-Tard’s approach last year.
Seven & i did not immediately respond to a request for comment.
The company has 100 billion yen of buyback budget left, but can do more especially with the sale of York Holdings, Shunsuke Kuriyama, an equities analyst at Jefferies Japan, had said in a note to clients earlier this week.
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Bain Capital is nearing a deal to buy Seven & i’s supermarket business in a transaction that could be announced as soon as this week, Bloomberg News reported on Wednesday. A potential deal may value York Holdings, an umbrella company for supermarkets, restaurants and other assets split from Seven & i’s convenience store business, at over 700 billion yen, one of the sources said. BLOOMBERG
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