7-Eleven parent company rejects $39 billion buyout bid
The Japanese company that operates 7-Eleven convenience stores has rejected a buyout offer from Alimentation Couche-Tard Inc., saying it "grossly" undervalues the company's value.
In August, Tokyo-based Seven and i Holdings received a non-binding takover proposal from Couche-Tard, which operates more that 16,000 Couche-Tard and Circle K stores across North America and Europe, to acquire all outstanding shares of Seven & i for $14.86 per share, or $38.5 billion. (7-Eleven is the world's biggest convenience store chain, with 85,000 stores across 20 countries and territories.)
In a letter released on Friday, Stephen Dacus, who chairs a special committee of outsiders charged with reviewing the offer, wrote that “after a thorough review and discussion of the proposal, the Seven & i board has unanimously concluded, based on the unanimous recommendation of the special committee, that the proposal is not in the best interest of Seven & i shareholders and other stakeholders.”
According to Dacus, the proposal "grossly" undervalues the company's intrinsic value and its potential. He also noted that even if Couche-Tard were to increase its offer “very significantly,” the proposal fails to address the many challenges it would face from U.S. regulators.
“Your proposal does not adequately acknowledge the multiple and significant challenges such a transaction would face from U.S. competition law enforcement agencies in the current regulatory environment and provides no certainty to closing,” he wrote. “Beyond your simple assertion that you do not believe that a combination would unfairly impact the competitive landscape and that you would ‘consider’ potential divestitures, you have provided no indication at all of your views as to the level of divestitures that would be required or how they would be effected.”
Dacus pointed out that Seven & i is open to considering proposals that are in the best interests of the company’s stakeholders and shareholders and address its concerns regarding certainty of closing in the current regulatory environment. But he cautioned that it will resist one that “deprives our shareholders of the company’s intrinsic value or that fails to specifically address very real regulatory concerns.”
The Couche-Tard bid for Seven & i is the largest all-cash offer for a company since Elon Musk bought Twitter for $40.2 billion in 2022, according to LSEG data, reported Reuters. It would create the world's largest convenience store chain and a new retail powerhouse.
