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>Recent reports suggest an MBO if firming up, with partial sale of US to ACT and even the Japan CVS business so a big value solution for all concerned.</li>
<li>Not so fast: an ACT purchase of 7-11 US looks more likely to be blocked given yesterday's ruling on the merger of grocery giants Kroger and Albertsons.</li>
<li>The valuation of the Japan business may need a correction too if the last six months of poor numbers continue – given this is because of price perception, they may.</li>
</ul>


Recent reports suggest an MBO if firming up, with partial sale of US to ACT and even the Japan CVS business so a big value solution for all concerned.
Not so fast: an ACT purchase of 7-11 US looks more likely to be blocked given yesterday's ruling on the merger of grocery giants Kroger and Albertsons.
The valuation of the Japan business may need a correction too if the last six months of poor numbers continue – given this is because of price perception, they may.


7&I (3382JP) - Spanners in the Works: FTC Blocks Another US Retail Merger and 7-11 Japan Sales Slump

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Reportedly, Ito Junro's MBO 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 (3382 JP)</a> includes a US assets IPO to help pay down MBO debt to Japanese banks.  Possible strategic mistake by Ito-san here.</li>
<li>Starwood/Warburg Pincus' firm Offer for <a href="https://www.smartkarma.com/entities/esr-group-ltd" target="_blank" data-smartkarma-citation="entities:27983:1" rel="noopener">ESR Group (1821 HK)</a> secures support from 30.79% of the register.</li>
<li>We may be wrong on <a href="https://www.smartkarma.com/entities/sanrio-co-ltd" target="_blank" data-smartkarma-citation="entities:16476:1" rel="noopener">Sanrio (8136 JP)</a> by a big factor but the multiple and the concentration risk of momentum factor means you are in an illiquid stock.</li>
</ul>


Reportedly, Ito Junro's MBO for Seven &amp; I (3382 JP) includes a US assets IPO to help pay down MBO debt to Japanese banks.  Possible strategic mistake by Ito-san here.
Starwood/Warburg Pincus' firm Offer for ESR Group (1821 HK) secures support from 30.79% of the register.
We may be wrong on Sanrio (8136 JP) by a big factor but the multiple and the concentration risk of momentum factor means you are in an illiquid stock.


Last Week in Event SPACE: Seven & I Holdings, ESR Group, Sanrio, HKBN

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>On 4 December, Bloomberg reported that the <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> MBO is set to include plans for a US Assets IPO to raise more than JPY1 trillion. </li>
<li>The MBO faces two immediate challenges: securing financing and the Board’s approval. The US Assets IPO would help alleviate both these issues.</li>
<li>The potential market cap of US Assets is around US$24 billion, or 53% of 7&amp;i’s market cap. The US Assets IPO should also encourage Couche-Tard to persist with its offer. </li>
</ul>


On 4 December, Bloomberg reported that the Seven &amp; I Holdings (3382 JP) MBO is set to include plans for a US Assets IPO to raise more than JPY1 trillion. 
The MBO faces two immediate challenges: securing financing and the Board’s approval. The US Assets IPO would help alleviate both these issues.
The potential market cap of US Assets is around US$24 billion, or 53% of 7&amp;i’s market cap. The US Assets IPO should also encourage Couche-Tard to persist with its offer. 


Seven & I Holdings (3382 JP): The MBO Is Starting to Shape Up

Travis Lundy

<ul>
<li>A Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-12-04/seven-i-60-billion-management-buyout-to-include-us-assets-ipo?srnd=homepage-asia" target="_blank" rel="noopener">article</a> late in the trading session today said the <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> MBO proposal by Ito family scion Ito Junro includes a US assets IPO.</li>
<li>The idea? IPO proceeds would help pay down MBO debt to Japanese banks. Seven &amp; i would retain a stake. This is not dissimilar to Berkshire Hathaway buying a stake.</li>
<li>But more directly, this leads us back to <a href="https://www.smartkarma.com/insights/7-i-3382-what-if-a-modest-proposal" target="_blank" data-smartkarma-citation="insights:166268" rel="noopener">7&amp;I (3382) - What If...  A Modest Proposal</a>. Possible strategic mistake by Ito-san here. ACT should act on this.</li>
</ul>


A Bloomberg article late in the trading session today said the Seven &amp; I Holdings (3382 JP) MBO proposal by Ito family scion Ito Junro includes a US assets IPO.
The idea? IPO proceeds would help pay down MBO debt to Japanese banks. Seven &amp; i would retain a stake. This is not dissimilar to Berkshire Hathaway buying a stake.
But more directly, this leads us back to 7&amp;I (3382) - What If...  A Modest Proposal. Possible strategic mistake by Ito-san here. ACT should act on this.


7&I (3382 JP) - Ito-San MBO Plan Includes 7-Eleven US IPO... Which LeadsTo A Modest Proposal

<ul>
<li>The sale process of <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> "unit" York Holdings, with 31 sub-units, has started. 7+ bidders bid in Round 1. Due dili follows then Round 2.</li>
<li>I expect SST+support ops get sold, and the specialty stores get carved out. I expect the deal to get decided by end-Feb 2025. Noises about real estate enhancement are encouraging.</li>
<li>This is still all to the good, so I include a Gratuitous Chart Showing 7&amp;i's Up-And-To-The-Rightness</li>
</ul>


The sale process of Seven &amp; I Holdings (3382 JP) "unit" York Holdings, with 31 sub-units, has started. 7+ bidders bid in Round 1. Due dili follows then Round 2.
I expect SST+support ops get sold, and the specialty stores get carved out. I expect the deal to get decided by end-Feb 2025. Noises about real estate enhancement are encouraging.
This is still all to the good, so I include a Gratuitous Chart Showing 7&amp;i's Up-And-To-The-Rightness


7 & I (3382) - York Holdings Sale Process, Timeline, Nuances

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&I (3382JP) - Spanners in the Works: FTC Blocks Another US Retail Merger and 7-11 Japan Sales Slump

Potential MBO of a firm may not be as straightforward as initially thought, with potential hurdles in the form of a blocked ACT purchase and a...

Michael Causton

Last Week in Event SPACE: Seven & I Holdings, ESR Group, Sanrio, HKBN

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett