7-Eleven Parent Selects Loeb-Backed Candidate as Next President

TOKYO—The parent of 7-Eleven said Friday its nomination committee selected the preferred candidate of activist investor Daniel Loeb as its next president, likely concluding a power struggle that burst into the open this month when the company's longtime chief executive abruptly quit.

Tokyo-based Seven & i Holdings Co. said the committee picked Ryuichi Isaka, 58 years old, who has helped fuel growth at 7-Eleven convenience stores, to lead the holding company. The decision comes after the resignation of 83-year-old Chairman and Chief Executive Toshifumi Suzuki, who had reigned over the retail empire for nearly a quarter-century.

Mr. Isaka would succeed company President Noritoshi Murata, who is also resigning.

The selection was a rare victory for a U.S. activist investor in Japan and followed a public campaign by Mr. Loeb against a plan by Mr. Suzuki to oust Mr. Isaka from the company's top ranks. Mr. Suzuki's plan was defeated by the board on April 7, falling one vote short of a majority among the 15 directors. He resigned following the vote.

Mr. Loeb, who has said his hedge fund Third Point LLC owns hundreds of millions of dollars in Seven & i Holdings common shares, praised Mr. Isaka in a March 27 letter to the board, saying he was a natural candidate to lead the holding company.

"Mr. Isaka has been instrumental to the success of Seven-Eleven Japan, which is the group's core business," Mr. Loeb wrote in the letter. He said the successor to Mr. Suzuki should "have a vision to profitably grow the 7-Eleven store network in Japan, North America and other countries."

The nomination committee's choice still needs approval from the board Tuesday and final backing from shareholders when they meet in May. But the committee included a former opponent of Mr. Isaka, suggesting that consensus might have been reached.

Mr. Suzuki had earlier questioned Mr. Isaka's ability to lead the company and said he resigned to take responsibility for his failure to persuade a majority of the board to go along with his plan.

The likely elevation of Mr. Isaka will leave strategic challenges for the retailer, which combines a growing and profitable global 7-Eleven convenience-store business with less successful businesses including a money-losing big-box retailer in Japan called Ito-Yokado.

Under Mr. Suzuki, the company aggressively acquired other retailers including one, Millennium Retailing Inc., that operates higher-end Japanese department stores Sogo​ and Seibu. Mr. Loeb criticized the strategy, pushing Seven & i Holdings to shed Ito-Yokado and focus on convenience stores.

Analysts said Mr. Suzuki's exit was likely to accelerate restructuring. His resignation could mean a shift toward "more selective business portfolio management," said Nomura Securities analyst Masafumi Shoda. In March, the company said that it would close some unprofitable supermarkets and department stores.

SMBC Nikko Securities analyst Yoshiyuki Namiki said he expected the new leadership to foster broader decision-making and give managers more leeway compared with Mr. Suzuki, who was known for a top-down style that included taste-testing new varieties of "onigiri" rice balls before they went on sale at 7-Eleven stores in Japan.

Write to Megumi Fujikawa at [e-mail]

(END) Dow Jones Newswires

April 15, 2016 08:45 ET (12:45 GMT)

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