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Seven & i on Friday rejected a preliminary offer made last month by Alimentación Couche-Tard to acquire the Japanese parent company of convenience store chain 7-Eleven.
The decision came “unanimously” from Seven & i's board of directors, based on the unanimous recommendation of a special committee the company set up to consider the proposal, Chairman Stephen Dacus said. I wrote in a letter.
According to the letter, Couche-Tard, which owns brands such as Couche-Tard, Circle K and Ingo, had proposed to acquire all of Seven & i's outstanding shares for $14.86 per share.
A Circle K convenience store in Toronto, Monday, Aug. 19, 2024. Alimentation Couche-Tard SA, which operates Circle K, has made a proposal to buy much larger rival Seven & i Holdings Inc., owner of 7-Eleven, in what would be the largest acquisition by a foreign company. (Laura Procter/Bloomberg via Getty Images/Getty Images)
Dacus said Seven & i's board of directors “[es] For several important reasons, we do not believe that your proposed proposal provides a basis for engaging in substantive discussions regarding a potential transaction.”
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He said Seven & i is “ready to engage in sincere discussions if a proposal is submitted that fully recognises our unique intrinsic value and addresses our concerns about the certainty of completing the transaction under the current regulatory environment.”
“The special committee believes that your proposal is poorly timed and materially undervalues our standalone path forward and the additional feasible steps we believe we can take to realize and enhance shareholder value in the near to medium term,” Seven & i's chairman said of the preliminary proposal. “The board is confident that we can realize and enhance shareholder value through several strategic actions, including, but not limited to, our U.S. operations, which we are actively pursuing.”
The logo of a Seven-Eleven convenience store operated by Seven & i Holdings is illuminated in Kobe, Japan, on Friday, Aug. 30, 2024. Alimentacion Couche-Tard has made a preliminary, non-binding proposal to acquire Seven & i, the world's second-largest chain by number of stores it operates. (Koriyama Soichiro/Bloomberg via Getty Images/Getty Images)
Seven & i owns a number of businesses, including convenience stores and supermarkets, and operates approximately 85,000 stores worldwide.
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The company's market capitalization reached about 5.56 trillion yen on Friday as investors reacted to the news.
Seven & i also said in its letter that Couche-Tard had not adequately addressed in its proposed acquisition the regulatory challenges the deal might face, particularly in the United States.
The Canadian convenience store company “did not provide any indication of your views regarding the level of divestiture that would be required or whether you were prepared to take all steps necessary to obtain regulatory approval,” 7-Eleven's parent company argued.
A 7-Eleven store in Kawasaki, operated by Seven & i Holdings, on Monday, Aug. 19, 2024. Alimentacion Couche-Tard, which operates Circle K, has made a proposal to buy rival 7-Eleven owner Seven & i Holdings. (Akio Kon/Bloomberg via Getty Images/Getty Images)
FOX Business has reached out to Couche-Tard for comment on Seven & i's response to the proposal.
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The rejection of the preliminary proposal came less than three weeks after both Couche-Tard and Seven & i disclosed that they had received takeover bids from a Canadian company.
7-Eleven's parent company vowed at the time to announce a decision promptly once the special committee had finished considering Couche-Tard's proposal, and said it would also consider a spin-off plan and “other alternatives.”
