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Third Point buys stake in Japan's Seven & I

[TOKYO] Third Point has bought a stake in retailer Seven & I Holdings, sources with knowledge of the matter said on Tuesday, the latest investment in Japan for the US hedge fund run by billionaire investor Daniel Loeb.

Shares of the 7-Eleven convenience store operator rose more than 4 per cent in early trade.

It was not clear when Third Point acquired the stake, which is less than 5 per cent of Seven & I, the sources said, asking not to be identified because the investment has not been publicly disclosed.

Third Point wants the Japanese retailer to downsize its general merchandise business to improve profitability, they said.

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Seven & I declined to comment.

The retailer has forecast a fifth straight year of record operating profit for the current fiscal year, powered by the strength of its convenience store business.

But it trimmed its estimate this month as losses at its Ito-Yokado supermarket business weighed, and it announced plans to shutter 40 unprofitable Ito-Yokado stores.

Third Point is well-known in Japan for having invested in firms such as Sony Corp and Fanuc Corp, and pressuring them for reforms.

The fund succeeded in getting Fanuc to raise its dividend payout ratio after demanding the industrial robot maker increase shareholder returns.