By Mariko Katsumura, Scott Murdoch and Kane Wu
Japanese retail giant Seven & i Holdings said on today it had turned down Canada’s Alimentation Couche-Tard’s US$38.5 billion cash bid, rejecting an offer that would be the largest-ever foreign buyout of a Japanese company.
7-Eleven operator Seven & i said the takeover proposal was not in the best interest of shareholders and was likely to face significant antitrust challenges in the US, where the combined company would be the convenience store industry’s biggest by a considerable margin.
Seven & i, which said last month it had received an offer from Circle-K owner Couche-Tard without naming the price, disclosed the bid was at US$14.86 a share and said it was open to “sincerely consider” any proposals.
But it would “resist any proposal that deprives our shareholders of the company’s intrinsic value that fails to specifically address very real regulatory concerns,” Seven & i said in a letter addressed to Couche-Tard.
“We do not believe, for several critical reasons, that the proposal you have put forward provides a basis for us to engage in substantive discussions regarding a potential transaction,” said the letter sent from the chair of the Seven & i special committee of independent directors that was formed to consider the offer Stephen Dacus.
Couche-Tard did not immediately respond to a request for comment from Reuters. Its incoming CEO Alex Miller said on a post-earnings call on Thursday that Couche-Tard was confident in its ability to finance and complete the deal.
Seven & i shares were trading about 0.3 per cent higher at 2,157 yen (US$15.06) on Friday morning, above the value of the US$14.86 per share proposal. The stock traded at 1,761 yen (US$12.29) before Couche-Tard’s approach was announced on Aug. 19.
Couche-Tard shares have fallen about 8 per cent since its proposal to Seven & i was made public.
The Japanese company said if Couche-Tard was to increase the value of the offer “very significantly” it would still be concerned over whether a takeover would be able to progress.
“Your proposal does not adequately acknowledge the multiple and significant challenges such a transaction would face from US competition law enforcement agencies in the current regulatory environment and provides no certainty to closing,” Dacus said in the letter.
‘Opening Salvo’
At US$38.5 billion, the Couche-Tard bid is the largest all-cash offer for a company since Elon Musk bought Twitter for US$40.2 billion in 2022, according to LSEG data. Mars Inc last month bid US$35.2 billion for food group Kellanova.
