The Japanese owner of convenience store chain 7-Eleven has rejected a $38 billion (£29.2 billion) takeover offer from a Canadian rival.
In a letter to Circle K owner Alimentation Couche-Tard (ACT), Seven & i Holdings said the Canadian company’s offer “significantly undervalues” the company and exposes it to regulatory risks. But the 7-Eleven owner added that it remains open to negotiations and is willing to consider better offers. ACT did not immediately respond to our reporters’ request for comment.
“The special committee believes that your proposal is timely and significantly undervalues the company’s independent path and additional opportunities to realise and unlock shareholder value,” the letter from Steven Dacus, chairman of Seven & i’s special committee of independent directors, said.
Please consider the offer. The letter also revealed that ACT’s initial offer valued Seven & i at $14.86 per share, more than 20% above its share price before the acquisition proposal was announced. ACT’s proposal comes at a time when the Japanese yen has weakened significantly against the US dollar, making Seven & i more affordable for foreign buyers.
“Your proposal does not adequately address the numerous and significant challenges that such a transaction would face from U.S. competition authorities,” Seven & i’s letter continued.
7-Eleven is the world’s largest convenience store chain, with 85,000 stores in 20 countries and regions. Quebec-based ACT is listed on the Toronto Stock Exchange and operates approximately 17,000 stores in more than 30 countries and regions in North America, Europe and Asia under the Circle K and Couche-Tard brands.
If successful, the transaction would more than double ACT’s footprint in the U.S. and Canada to approximately 20,000 locations. If successful, the acquisition would be the largest overseas acquisition by a Japanese company and create a global convenience store giant with 100,000 stores.
