filbet 7-Eleven Rejects Takeover Bid From Big Canadian Chain
filbet 7-Eleven Rejects Takeover Bid From Big Canadian Chain
The owner of 7-Eleven has rejected a buyout offer from a Canadian convenience store giantfilbet, snubbing a deal that most likely would have been the largest foreign-led acquisition of a Japanese company.
The move, while expected, will put pressure on the Japanese company to show it is taking other steps to increase the company’s value for its shareholders.
The Tokyo-based operator of 7-Eleven, Seven & i Holdings, said last month that it had received an unsolicited takeover proposal from Alimentation Couche-Tard.
In a letter to Couche-Tard released on Friday, Seven & i said its board of directors had concluded, based on a recommendation from a committee of independent directors, that the offer was not in the best interest of shareholders.
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SKIP ADVERTISEMENTSeven & i said it had found that Couche-Tard’s offer “grossly undervalues our stand-alone path and the additional actionable avenues we see to realize and unlock shareholder value,” wrote Stephen Dacus, a Seven & i outside director and chair of the committee.
Alimentation Couche-Tard operates more that 16,000 Couche-Tard and Circle K stores across North America and Europe. Seven & i sits atop a vast network of 85,000 stores, primarily in Asia and the United States. Couche-Tard’s takeover of Seven & i would have positioned it as one of the world’s largest retail groups.
Couche-Tard had offered to purchase all of the outstanding shares of Seven & i for $14.86 each, according to the letter, slightly below where the shares were trading on Friday morning. The price of Couche-Tard’s offer had not been previously disclosed.
Seven & i said it believed the proposed buyout would trigger competition investigations from regulators in the United States, where Couche-Tard and Seven & i are the two largest operators of convenience stores. Couche-Tard could not immediately be reached for comment.
In Japan, 7-Eleven is considered something of a national treasure, making any foreign-led takeover a long shot. Analysts questioned whether Couche-Tard would be capable of operating 7-Eleven stores better than their current owner.
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SKIP ADVERTISEMENTAny acquisition could have also triggered opposition from government officials in Japan.
In recent years, a growing number of Japanese companies have faced pressure from investors to bolster their market valuations.
The decision to reject the buyout offer could open Seven & i to heightened provocation from investors who believe the company is worth more than its current market value.
Seven & i operates a number of businesses, including a supermarket chain in Japan. The activist fund ValueAct Capital Management has been pushing Seven & i to narrow its focus to 7-Eleven stores, arguing that they would be worth more as a stand-alone company.
In the weeks since Couche-Tard’s bid was disclosed, some Seven & i shareholders have publicly called on the company to seriously evaluate the Canadian group’s offer.
The Japanese company’s next steps will be closely watched, as it will work to convince shareholders that it is taking steps to improve corporate value on its own. In its letter on Fridayfilbet, Seven & i said it was “single-mindedly focused on delivering value for 7 and i shareholders and other stakeholders.”