ValueAct Capital, the U.S. hedge fund that lost a public battle to change the board of Seven & i Holdings Co Ltd, has called for private dialogue with the Japanese retailer.
In a letter to Seven & i's chairman, ValueAct said it was "disappointed" with the outcome of the shareholder vote, but that it remained "committed to working with the company to create value for shareholders."
ValueAct had called for the removal of seven of Seven & i's board members, including its chairman, Toshifumi Suzuki. The hedge fund argued that the company's board was too slow to react to changes in the retail landscape and that it needed new leadership to improve its performance.
However, Seven & i's shareholders voted overwhelmingly to keep the existing board in place. In a statement, the company said that it "respected the outcome of the vote" and that it was "committed to working with all shareholders to create value for the company."
In its letter, ValueAct said it was "open to a private dialogue" with Seven & i's management to discuss "how we can work together to improve the company's performance."
It remains to be seen whether Seven & i will be willing to engage with ValueAct. However, the hedge fund's call for dialogue is a sign that it is not giving up on its efforts to change the company.
ValueAct is not the first hedge fund to lose a board battle in Japan. In 2017, Third Point lost a bid to replace the board of SoftBank Group Corp. However, Third Point eventually succeeded in getting SoftBank to make some changes, such as hiring a new chief executive officer.
It remains to be seen whether ValueAct will be able to achieve similar success with Seven & i. However, the hedge fund's call for dialogue is a sign that it is not giving up on its efforts to change the company.