Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Event-Driven

<ul>
<li>Seven &amp; I released 1H24 earnings today as well as details on planned restructuring of its business. Results included some one-off items hitting operating profit as well as lower footfall.</li>
<li>The bigger news was the plan to hive off the non-CVS retail operations into a new company, York Holdings, leaving a newly named 7-Eleven Corporation running CVS globally.</li>
<li>Unusually, Seven also mentioned the possibility of new strategic partners investing in York, including even the "original founding families", suggesting one way of holding on to control.</li>
</ul>


Seven &amp; I released 1H24 earnings today as well as details on planned restructuring of its business. Results included some one-off items hitting operating profit as well as lower footfall.
The bigger news was the plan to hive off the non-CVS retail operations into a new company, York Holdings, leaving a newly named 7-Eleven Corporation running CVS globally.
Unusually, Seven also mentioned the possibility of new strategic partners investing in York, including even the "original founding families", suggesting one way of holding on to control.


7-Eleven Corporation: A Clear Strategy for Long-Term Value, Founding Family Return to Super-Stores

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>H1 sales were GOOD. H1 earnings were BAD. New forecasts are UGLY. The CVS initiatives are RESPECTABLE, but US CVS market environment UNFORTUNATE. The creation of the new Holdco ENCOURAGING.</li>
<li>The Couche-Tard Bid? That's SEPARATE. Confidential. But three weeks after receiving the new proposal, it hasn't been publicly rejected. So that's a thing. </li>
<li>7&amp;i is progressing with its Standalone Plan, as it should, because ACT's bid is more a show of faith for discussions. The York Holdings structure is INTERESTING.</li>
</ul>


H1 sales were GOOD. H1 earnings were BAD. New forecasts are UGLY. The CVS initiatives are RESPECTABLE, but US CVS market environment UNFORTUNATE. The creation of the new Holdco ENCOURAGING.
The Couche-Tard Bid? That's SEPARATE. Confidential. But three weeks after receiving the new proposal, it hasn't been publicly rejected. So that's a thing. 
7&amp;i is progressing with its Standalone Plan, as it should, because ACT's bid is more a show of faith for discussions. The York Holdings structure is INTERESTING.


7&I Results and Plans - The Good, The Bad, The Ugly, The Respectable, Unfortunate, and Encouraging

<ul>
<li>This AM, partway through the morning session, Bloomberg carried an article saying <a href="https://www.smartkarma.com/entities/alimentation-couche-tard-inc" target="_blank" data-smartkarma-citation="entities:25103:1" rel="noopener">Alimentation Couche-Tard (ATD CN)</a> had upped its bid for <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> to US$18.19/share.</li>
<li>The stock popped, then faded sharply. Near and after the close we got more headlines. Some of these preview tomorrow's earnings report. Some preview the restructuring announcements.</li>
<li>The Nikkei comment regarding an earnings shortfall vs Plan suggests weaker US convenience store sales and consumer footfall are to blame. Details will matter. But I'd buy dips.</li>
</ul>


This AM, partway through the morning session, Bloomberg carried an article saying Alimentation Couche-Tard (ATD CN) had upped its bid for Seven &amp; I Holdings (3382 JP) to US$18.19/share.
The stock popped, then faded sharply. Near and after the close we got more headlines. Some of these preview tomorrow's earnings report. Some preview the restructuring announcements.
The Nikkei comment regarding an earnings shortfall vs Plan suggests weaker US convenience store sales and consumer footfall are to blame. Details will matter. But I'd buy dips.


Revised Couche-Tard Bid for 7&I and a Flurry of News Items Ahead of Earnings

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>In response to media reports, <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> confirmed receiving a revised non-binding proposal from <a href="https://www.smartkarma.com/entities/alimentation-couche-tard-inc" target="_blank" data-smartkarma-citation="entities:25103:1" rel="noopener">Alimentation Couche-Tard (ATD CN)</a>. </li>
<li>The rumoured revised offer is US$18.19, a 22.4% premium to the initial US$14.86 offer. The revised terms are attractive vs precedent transactions and analyst price targets.</li>
<li>The Board would cite regulatory concerns and the revised offer's implied discount compared to peer multiples. At tomorrow's results, the Board must present a credible alternative value generation path.</li>
</ul>


In response to media reports, Seven &amp; I Holdings (3382 JP) confirmed receiving a revised non-binding proposal from Alimentation Couche-Tard (ATD CN). 
The rumoured revised offer is US$18.19, a 22.4% premium to the initial US$14.86 offer. The revised terms are attractive vs precedent transactions and analyst price targets.
The Board would cite regulatory concerns and the revised offer's implied discount compared to peer multiples. At tomorrow's results, the Board must present a credible alternative value generation path.


Seven & I Holdings (3382 JP): Pressure Mounts with a Couche-Tard Revised Offer

Greatview Aseptic Packaging / Event-Driven

<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.</li>
<li>Highest spreads: <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>, <a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" data-smartkarma-citation="entities:10802:1" rel="noopener">Greatview Aseptic Packaging (468 HK)</a>, <a href="https://www.smartkarma.com/entities/canvest-environmental-protection-group-co-ltd" target="_blank" data-smartkarma-citation="entities:100:1" rel="noopener">Canvest Environmental Protection Group (1381 HK)</a>, <a href="https://www.smartkarma.com/entities/shinko-electric-industries" target="_blank" data-smartkarma-citation="entities:15066:1" rel="noopener">Shinko Electric Industries (6967 JP)</a>, <a href="https://www.smartkarma.com/entities/capitol-health-ltd" target="_blank" data-smartkarma-citation="entities:14504:1" rel="noopener">Capitol Health (CAJ AU)</a>. 
</li>
<li>Lowest spreads: <a href="https://www.smartkarma.com/entities/dyna-mac-holdings-ltd" target="_blank" data-smartkarma-citation="entities:16153:1" rel="noopener">Dyna Mac Holdings (DMHL SP)</a>, <a href="https://www.smartkarma.com/entities/platinum-asset-management" target="_blank" data-smartkarma-citation="entities:914:1" rel="noopener">Platinum Asset Management (PTM AU)</a>, <a href="https://www.smartkarma.com/entities/xingda-international-holdings" target="_blank" data-smartkarma-citation="entities:17836:1" rel="noopener">Xingda International (1899 HK)</a>, <a href="https://www.smartkarma.com/entities/trancom-co-ltd" target="_blank" data-smartkarma-citation="entities:13043:1" rel="noopener">Trancom Co Ltd (9058 JP)</a>, <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a>. 
</li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Shanghai Henlius Biotech (2696 HK), Greatview Aseptic Packaging (468 HK), Canvest Environmental Protection Group (1381 HK), Shinko Electric Industries (6967 JP), Capitol Health (CAJ AU). 

Lowest spreads: Dyna Mac Holdings (DMHL SP), Platinum Asset Management (PTM AU), Xingda International (1899 HK), Trancom Co Ltd (9058 JP), Fuji Soft Inc (9749 JP). 



Merger Arb Mondays (07 Oct) - GA Pack, Henlius, Canvest, Samson, T-Gaia, Descente, Platinum

Japan

Seven & i Holdings Co., Ltd. is a holding company which was established through the merger of Ito-Yokado Co., Seven Eleven Japan Co., and Denny's Japan. The Company plans, manages, and operates mainly convenience stores, supermarkets, and department stores.

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Seven & I Holdings (3382 JP)

7-Eleven Corporation: A Clear Strategy for Long-Term Value, Founding Family Return to Super-Stores

Seven & I showed some falls in SSS and income in 1H. Plans to restructure business by creating York Holdings for non-CVS retail ops, with the...

Michael Causton

7&I Results and Plans - The Good, The Bad, The Ugly, The Respectable, Unfortunate, and Encouraging

Seven and I today announced results, new lower forecasts, plans to spin out almost all the retail businesses into an Intermediate Holdco (w/...

Travis Lundy

Revised Couche-Tard Bid for 7&I and a Flurry of News Items Ahead of Earnings

7 and i saw another flurry of news today. A 22-25% higher bid from ACT to ¥2700. A profit warning from the Nikkei on weak US results. More sales. A...

Travis Lundy