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Artisan urges serious consideration of ACT's offer

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Deal would likely be biggest overseas buyout of a Japan

firm

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Artisan says ACT 'uniquely positioned' to boost corporate

value

(Adds attempt to get company comment in paragraph 5, details in

paragraphs 9-16, bullets)

By Rocky Swift and Kevin Buckland

TOKYO, Aug 31 (Reuters) - U.S. fund Artisan Partners

Asset Management ( APAM ) ramped up pressure on Japan's Seven

and i Holdings ( SVNDF ), urging the retailer's board to provide

an update on a takeover bid from Canada's Alimentation

Couche-Tard ( ANCTF ) by Sept. 19.

In a letter dated Friday and sent to journalists, Artisan

portfolio managers N. David Samra and Benjamin L. Herrick

recommended that Seven & i ( SVNDF ), operator of the 7-Eleven convenience

store chain, seriously consider ACT's offer and solicit offers

for the company's Japanese subsidiaries "as quickly as

possible."

"ACT is uniquely positioned to enhance (Seven & i's ( SVNDF ))

corporate value," Samra and Herrick wrote.

"Negotiating with ACT is the best tactic to preserve

positive stakeholder outcomes in Japan," they said. "It is

imperative that the board of directors negotiate with ACT

immediately to achieve the best possible outcome for

shareholders."

Phone calls to Seven & i ( SVNDF ) were unanswered on Saturday. The

company has said it does not comment on individual shareholders.

Artisan's letter, highly critical of Seven & i's ( SVNDF ) record of

enhancing corporate value, highlights the pressure on the

company from shareholders over the potential deal, which would

likely be the biggest-ever overseas buyout of a Japanese firm.

ACT, the owner of Circle-K convenience stores, last week

said it had approached Seven & i ( SVNDF ) about a possible acquisition,

without disclosing a potential deal value.

Artisan has been a critic of Seven & i's ( SVNDF ) management and

structure since 2019, when, according to the letter, it became a

shareholder. It said it is an active - not activist -

shareholder, which engages with corporate management and boards.

The fund said its Sept. 19 deadline for an update was set

based on the bid coming to light on Aug. 19.

At that time, Seven & i ( SVNDF ) said ACT had proposed buying all

outstanding shares of the company. ACT said it had sent the

retailer a "friendly proposal" and was focussed on reaching a

mutually agreeable transaction.

Artisan said Seven & i's ( SVNDF ) "lack of official communication" so

far, along with "rumors" that the company may be seeking a

special designation to impede a takeover, were "troubling".

Bloomberg News reported this week that Seven & i ( SVNDF ) was seeking

designation as a "core" company in Japan, which would require

the finance ministry to thoroughly investigate any entity that

seeks to acquire more than 10% of its shares.

Allowing that to happen would run contrary to the

government's recent push to improve corporate governance in

Japan, which had helped lure overseas money into the local stock

market, powering it to record highs this year.

"Government intervention would signal Japan Inc. is not

prepared to stand behind these relatively new, yet globally

competitive measures to improve asset efficiency," Artisan's

letter said. "Shareholders deserve a fair and independent

process."

Artisan holds 0.85% of Seven & i's ( SVNDF ) outstanding shares, LSEG

data showed.