Weekly News Wrap: Seven & i rebuffs criticisms from investor; Future Retail’s lenders urges putting assets up for auction
And Starbucks China reels over airport cafe closures and low traffic to offices.
From Reuters:
Seven & i Holdings has rebuffed criticism from activist investor ValueAct Capital, saying it had not presented any plans to enhance value.
ValueAct, which owns a 4.4% stake in Seven & i, has said the 7-Eleven convenience store owner is "vastly underperforming its potential" and should consider structural reforms and asset sales.
Its demands included the creation of a "strategic review committee", comprising outside directors, to consider whether the "sale or spin-off of divisions or a business combination with a third party would deliver superior value and strategic benefits to the company and its stakeholders."
In a response letter, Seven & i said its management structure enables smooth decision making, and that shareholders have ample opportunity to communicate with outside directors, citing 10 dialogues between the company and ValueAct last year.
It said it would consider increasing opportunities for direct dialogue between investors and outside directors, as well as management.
Read more here.
From Reuters:
Lenders to Future Retail, the company being fought over by Reliance Industries and Amazon.com, have told India's Supreme Court that its assets should be put up for auction after it missed payments.
They also said they have started classifying loans to the country's second-largest retailer as non-performing and would have to make combined provisions of $1.1-1.2b (INR80-90b) due to the non-payment.
"Let it be subjected to an open bid...This is the only solution," Rakesh Dwivedi, a lawyer acting for 30 or so of Future's lenders, told the Supreme Court judges, citing the prolonged litigation so far between Future and Amazon.
Dwivedi added that Future's two suitors - Amazon and Reliance - could then bid for the retailer's assets.
The court did not hand down any decisions on February 3 and said it will hear the matter again in due course.
Read more here.
From CNBC:
Reduced international travel and low traffic to office buildings weighed on Starbucks’ same-store sales in China, CEO Kevin Johnson has said.
“Our stores that are in airports in the international travel terminals are closed, so clearly that’s weighing on comps,” Johnson said on CNBC’s “Squawk on the Street.” “Stores that are in office districts are much slower than they used to be.”
He added that cafes in residential and commercial zones are seeing same-store sales growth, a positive sign for demand in the country. However, it isn’t enough to offset declines elsewhere.
Read more here.
https://www.cnbc.com/2022/02/02/starbucks-ceo-kevin-johnson-on-why-chinese-sales-were-weak.html
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