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Seven & i on Friday declined the preliminary proposal that Alimentation Couche-Tard made last month to acquire the Japanese corporate parent of the 7-Eleven convenience store chain.
The decision was a “unanimous” one from Seven & i’s board based on a unanimous recommendation of the special committee that the company put together to weigh the proposal, Chairman Stephen Dacus wrote in a letter.
Couche-Tard, whose brands include Couche-Tard, Circle K and Ingo, had proposed spending $14.86 per share to acquire all Seven & i’s outstanding shares, according to the letter.
A Circle K convenience store in Toronto on Monday, Aug. 19, 2024. Circle K operator Alimentation Couche-Tard Inc. made a proposal to take over much larger rival and 7-Eleven owner Seven & i Holdings Co., in what would be the biggest foreign takeo (Laura Proctor/Bloomberg via Getty Images / Getty Images)
Dacus said Seven & i’s board “do[es] 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.”
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He did note Seven & i was “open to engaging in sincere discussions should you put forth a proposal that fully recognizes our standalone intrinsic value and addresses our concerns regarding certainty of closing in the current regulatory environment.”
“The Special Committee believes that your proposal is opportunistically timed and grossly undervalues our standalone path and the additional actionable avenues we see to realize and unlock shareholder value in the near- to medium-term,” Seven & i’s chairman wrote of the preliminary offer. “The Board is confident that it can realize and unlock shareholder value through a number of strategic actions, including but not limited to our U.S. business, that we are actively pursuing.”
An illuminated logo at a 7-Eleven convenience store, operated by Seven & i Holdings Co., in Kobe, Japan, on Friday, Aug. 30, 2024. Alimentation Couche-Tard Inc. had made a preliminary non-binding proposal to buy Seven & i, which operates more (Soichiro Koriyama/Bloomberg via Getty Images / Getty Images)
Seven & i has a swath of convenience stores and supermarkets and other businesses under its umbrella. It has about 85,000 total stores globally.
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The company’s market capitalization hit around 5.56 trillion Japanese yen on Friday amid investors reacting to the news.
In the letter, Seven & i said it also thought Couche-Tard did not address possible regulatory challenges – particularly those a deal could encounter in the U.S. – sufficiently in its acquisition offer.
The Canadian convenience store company “provided no indication at all of your views as to the level of divestitures that would be required” or “whether you would be prepared to take all necessary actions to…
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