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ValueAct urges 7-Eleven owner to examine alternative strategies



ValueAct Capital has called on 7-Eleven’s owner Seven & i Holdings to listen to shareholder concerns and to consider strategic alternatives, including a possible sale.

U.S.-based investment firm ValueAct has written to the Japanese company’s board to say it must quickly pursue “bold, structural reform”, calling it “strategically unfocused” and saying it is “vastly underperforming its potential”.

There has been growing frustration among investors in the 7-Eleven convenience store chain’s owner about its lagging share price, with some shareholders pushing it to break up.

Seven & i should “consider alternative ownership structures for its business units as well as the whole company to achieve the focus necessary to improve competitiveness and performance of the businesses, especially 7-Eleven,” ValueAct’s letter said.

ValueAct, which owns a 4.4% stake in Seven & i, said it is making two requests of the board and was making the letter public, a rare step for the investment firm.

To put extra pressure on the board, ValueAct said it also wants to hear a public response to its requests after the next regularly scheduled board meeting, which is in early February.

It said it wants one or more outside directors from Seven & i to contact portfolio managers at 30 of the company’s biggest investors to “listen directly to their views.”

And it called for the creation of a “Strategic Review Committee”, made up of only outside directors to consider whether the “sale or spin-off of divisions or a business combination with a third party would deliver superior value and strategic benefits to the company and its stakeholders.”

Such a public statement is a highly unusual step for ValueAct, which has spent decades building a reputation for working collaboratively with management instead of dictating terms publicly as many activist investors have done.

It is one of a small number of U.S. firms that have invested more heavily in Japanese companies and have quietly tried to work with management and the boards to make some changes.

Its holding in Seven & i follows investments in Nintendo Olympus Corp and JSR Corp.

While ValueAct had engaged with Seven & i privately it said the response “has been unsatisfactory”, adding that it has “lost confidence in management’s ability to set the strategic course without direct and public input from independent shareholders.”

ValueAct is the biggest actively managed institutional shareholder in Seven & i. Fund managers T. Rowe Price and Artisan Partners and pension fund California Public Employees Retirement System hold smaller stakes.

In its letter, ValueAct also said that it may make shareholder proposals at the company’s annual meeting.

This week the Financial Times reported that three investors, who have previously told the company that sweeping reform is necessary, may also submit proposals at the meeting expected to take place in May or June.

(Reporting by Svea Herbst-Bayliss; Editing by Chizu Nomiyama and Alexander Smith)


World's fastest passenger jet goes supersonic in tests – CNN



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YYJ delays: RCMP called to Victoria International Airport | CTV News – CTV News VI



Travellers who have a flight planned at Victoria International Airport (YYJ) on Tuesday are being warned of travel disruptions due to police activity.

Sidney/North Saanich RCMP say the airport was closed after a suspicious package was discovered around 1:30 p.m.

Cpl. Andres Sanchez of the Sidney/North Saanich RCMP says that the airport was closed to all incoming and outgoing flights “out of an abundance of caution.”

He said the airport will remain closed until police “can be sure it is safe for the public to travel.”


“The package was located at the departures/check-in [area], so it was brought in by a passenger,” said Sanchez Tuesday afternoon.

The package was flagged by Canadian Air Transport Security Authority (CATSA) staff who spotted what appeared to be an “incendiary device” within a bag, he said.

“CATSA employees performed the checks that you normally do at a departure situation at the airport,” he said.

“They scanned the bag and found there were items inside that could be of a dangerous nature and at that point police were called to the scene to investigate further,” he said.

Mounties say a specialized RCMP team has been called in from the mainland to remove the bag from the premises and to “ensure the package is dealt with in a safe manner.”


Sanchez says the individual who brought the bag is under investigation, but it’s unclear if any criminal charges will be recommended yet.

“Again, because we don’t know what’s in that bag we can’t speak further on that,” he said.

In the meantime, people are asked to avoid the airport for the next few hours, according to RCMP spokesperson Sgt. Chris Manseau.

Around 4:20 p.m., the airport said all scheduled commercial flights for the next two hours were cancelled.

The airport is working with airlines to keep them updated on the status of flights.

Police say they hope the airport will be able to reopen Tuesday night, but it’s uncertain how long the investigation at the property will take.

Travellers should check the YYJ website for the latest updates on their flights, according to the airport. 

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​Scotia hikes dividend, smashes Q2 profit estimates – BNN



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Bank of Nova Scotia opened earnings season for Canada’s Big Six on Wednesday with a beat and a dividend hike as profit climbed in all its major divisions other than capital markets.

Scotia said its net income in the fiscal second quarter, which ended April 30, rose to $2.75 billion from $2.46 billion a year earlier. On an adjusted basis, Scotia earned $2.18 per share; the average estimate among analysts tracked by Bloomberg was for $1.97 in adjusted per-share earnings.

The bank also announced its quarterly dividend will rise to $1.03 per share from $1.00, effective July 27.

“Continued loan growth of 13 per cent, an improving net interest margin, strong customer balance sheets, combined with prudent expense management, positions the Bank well to grow its earnings,” said Brian Porter, Scotia’s president and chief executive officer, in a release.

Profit in Scotia’s core Canadian banking division soared 27 per cent year-over-year to $1.18 billion in the latest quarter. Credit quality was a swing factor compared to a year earlier, as Scotia released $12 million from the unit’s provisions for loan losses in the most recent quarter; a year earlier, it booked $145 million in new provisions for loans that could go bad.

Scotia said it had an average of $271.8 billion in residential mortgages on its Canadian loan book during the fiscal second quarter, up almost three per cent from the prior quarter.

Growth in Scotia’s international division was even more pronounced, as net income surged 44 per cent year-over-year to $605 million as provisions for loan losses fell and revenue climbed.

Scotia’s Global Banking and Markets division was a profit drag, as net income slumped six per cent year-over-year to $488 million, which the bank attributed to higher non-interest expenses and lower non-interest income.

In a report to clients after the results were released, Barclays Analyst John Aiken said he doesn’t think Scotia will be an outlier with the profit slump in its capital markets business.

However, Aiken did flag that the drop in Scotia’s Common Equity Tier 1 capital ratio to 11.6 per cent from 12.0 per cent in the previous quarter might not sit well with investors.

“The only real knock on the results will likely be Scotia’s lower-than-peer regulatory ratio, which was drawn down again from share repurchases. While we believe that [Scotia] is heading towards a much more efficient capital level, the market does not like outliers, particularly where capital and an uncertain outlook is concerned.”

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