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ValueAct Capital informed Seven & i Holdings on Friday it would lobby to remove four directors from the Japanese’s convenience store operator’s 14-member board, citing “a failed corporate strategy.”

ValueAct, which owns a 4.4% stake of Seven & i, had called on the company’s management in January to spin off its 7-Eleven convenience store chain. The fund has been invested in the company and making proposals since 2021.

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In a letter reviewed by Reuters, the hedge fund said it had become frustrated that its engagement with Seven & i over several months had not led to the company adopting a strategy to grow faster and improve profitability and its market valuation.

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A “conglomerate discount has persisted” because the management of most of the Seven & i businesses has repeatedly failed in spite of promises for “synergies” and structural reform, the letter said.

The letter did not state how ValueAct would seek to oust the four directors, whom it did not publicly identify. Additionally, the fund nominated four director candidates, who also were not named.

Seven & i declined to comment.

A tax-free spin-off of 7-Eleven could be completed through a listing on the Tokyo Stock Exchange in roughly a year, ValueAct said in January.

Seven & i announced earlier this month it will close an additional 14 Ito-Yokado supermarket stores in Japan and fully exit its apparel business as part of its structural reform plan.

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ValueAct, which is led by Mason Morfit, won a board seat earlier this year at cloud computing company Salesforce.

Six new directors joined Seven & i’s board last year. ValueAct supported those newcomers at the time.

ValueAct blames the four directors for “governance failures,” the letter said.

The directors “failed to disclose a reported acquisition proposal to the Company in 2020,” failed to conduct an objective succession review, and did not conduct an independent strategic review in line with governance best practices, ValueAct said.

Seven & i shares rose 1.3% in Tokyo versus a 0.2% decline in the benchmark Nikkei index.

(Reporting by Svea Herbst-Bayliss in New Orleans; Additional reporting by Makiko Yamazaki and Rocky Swift in Tokyo; Editing by Lincoln Feast and Sonali Paul.)