By Megumi Fujikawa


TOKYO---Seven & i Holdings detailed plans to revamp its noncore businesses, accelerating efforts to reorganize its portfolio as the convenience-store giant faces a revised takeover bid from Canada's Alimentation Couche-Tard.

The 7-Eleven owner has been trying to improve profitability by focusing on its core convenience-store business and restructuring other segments. A successful effort could raise the bar for a potential acquisition by the Canadian owner of Circle K.

The Japanese retail conglomerate said Thursday that it will set up an intermediate holding company for its supermarket and other noncore businesses, including baby-goods chain Akachan Honpo.

Speaking at an earnings news conference, Seven & i Chief Executive Ryuichi Isaka apologized for worrying stakeholders because of the possible takeover news.

"We will respond sincerely to proposals which will increase our corporate value," Isaka said. The special committee will examine Couche-Tard's offer without any bias, he said.

The Japanese company on Wednesday said it received a new proposal, without elaborating. Isaka declined to disclose details.

The 7-Eleven owner early last month rejected the initial $39 billion buyout offer from Couche-Tard, saying the proposal underestimated the company's value and failed to sufficiently address regulatory issues.

Joseph DePinto, head of U.S. operations for the 7-Eleven chain, said Thursday that their stores sold more on average than Couche-Tard.

He also highlighted differences between the two companies, saying that Couche-Tard is more focused on fuel sales than Seven & i. Unlike Couche-Tard, which has more stores in suburban areas, 7-Eleven, which has an urban network in the U.S., faces difficult social challenges, such as homelessness and crime, he noted.

Seven & i has faced pressure from some foreign shareholders in recent years. It responded by shedding some businesses, such as unprofitable department-store operator Sogo & Seibu. In April, Seven & i said it was considering listing the supermarket business.

On Thursday, the company said it will bring in strategic partners and realize an initial public offering "with certainty and speed."

To affirm its commitment to the convenience-store business, the company plans to change its name to 7-Eleven Corp. and seek approval at a shareholders' meeting in May 2025.

The announcements came as Seven & i slashed its profit forecast for the current fiscal year, which ends in February, to 163.00 billion yen, equivalent to $1.09 billion, from Y293.00 billion.

It said that net profit for the six months ended August fell 35% from a year earlier to Y52.24 billion, missing analysts' consensus estimate. The company also recorded a Y45.88 billion special loss related to the withdrawal of its online supermarket operation.

Sluggish demand among middle- to low-income U.S. consumers amid inflation and higher interest rates hurt its overseas sales, Seven & i said, suggesting that its convenience-store business is also struggling to grow. First-half operating profit for its overseas convenience-store business fell to Y73.33 billion from Y112.83 billion a year ago.

Shares in Seven & i have jumped since Couche-Tard's initial offer was made public. The stock price briefly reached an all-time high of Y2,492.5 on Wednesday but fell back later, suggesting that some investors have doubts about the takeover attempt.


Write to Megumi Fujikawa at megumi.fujikawa@wsj.com


(END) Dow Jones Newswires

10-10-24 0820ET