ValueAct Capital Responds to Letter from the Board of Seven & i Holdings

Company has mischaracterized nature of ValueAct's efforts to improve Seven & i's governance and strategy

Improving the leadership and governance process is what is at stake in ValueAct's proposals

Seven & i has refused to respond substantively to ValueAct's detailed strategic analysis

Full letter and related materials available at https://valueact.com/presentations/

SAN FRANCISCO, April 27, 2023 /PRNewswire/ -- ValueAct Capital ("ValueAct"), a global investment firm who has been a major shareholder of Seven & i Holdings ("Seven & i" or "the Company") since 2020, today sent an open letter (see attached) to the Board of Seven & i in response to their public communication on April 25, 2023.

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ValueAct has earned its reputation as a collaborative and constructive partner to companies over decades, helping drive successful transformations and long-term value creation. ValueAct has engaged in good faith with Seven & i and its leadership for multiple years. The Board of Seven & i, however, has repeatedly refused to engage in constructive dialogue regarding the Company's strategic direction and has now resorted to mischaracterizing ValueAct's efforts to improve the Company's governance and performance for the benefit of all shareholders. As detailed in the letter, the Company has:

• Mischaracterized the nature of ValueAct's efforts. ValueAct rejects the Company's attempts to misinform shareholders by implying that ValueAct's campaign is to "force a hasty" spin-off of the CVS business. Shareholders are NOT being asked to vote on a spin-off but rather to vote in favor of a proposal that creates a truly independent board, which would conduct a careful and deliberate succession process for the Presidency and consider all alternatives available to the Company from the perspective of maximizing shareholder value and corporate value.
  
  
• Dismissed ValueAct's concerns over recordings, which is emblematic of weak leadership. The Company's recording of shareholders without consent is the latest in a long series of governance failures and Seven & i's response is not consistent with expectations for a Board to respond independently to controversial issues with legal implications and impact on dialogue with shareholders at a critical time.
   
• Failed to engage in a substantive strategy discussion. Seven & i needs to provide clear answers to shareholder questions in order to have a substantive strategy discussion – but it has so far refused to do so. Seven & i has thereby refused to progress strategic conversations in a substantive manner with ValueAct in private, and Seven & i has refused to answer ValueAct's clear and specific questions in public. ValueAct has shared thousands of pages of materials regarding strategy and spent countless hours without an adequate response from the Company. ValueAct believes the Board's answers should be clarified before the voting deadline for this year's annual meeting as shareholders consider whether or not to maintain President Isaka's leadership of the Company, and whether adding new independent perspectives could be helpful in the Company's considerations of Presidential succession and a wide range of strategic options.

Seven & i's disappointing response to ValueAct's efforts to improve Company governance and hone its strategy over the last year reaffirm ValueAct's belief that its shareholder proposals proposed at the 2023 Annual General Meeting are necessary. The letter was written to Shareholders and shared publicly because ValueAct believes there is an urgent need for change at the Company in order to repair trust in its governance and management.

About ValueAct Capital
ValueAct Capital, established in 2000, is a global investment firm managing capital on behalf of some of the world's largest institutional investors. The Firm's goal is to transform companies and help them become 21st Century Global Champions. VAC seeks to identify and invest in high-quality businesses that are temporarily under-valued, taking a patient, collaborative and constructive approach to value building for all stakeholders with long-term investments. The firm generally holds 10-18 investments at any given time, and ValueAct Capital's internal team has built a track record serving on over 55 public company board seats. For more information, please see https://valueact.com. To view the full letter please visit https://valueact.com/presentations/.

CONTACT: [email protected]

SOURCE ValueAct Capital