Last Updated on 06/09/2024 by Arun jain
The owner of 7-Eleven has denied Purchase offer The deal clinches what could be the largest foreign-led acquisition of a Japanese company, from the Canadian convenience store giant.
The move, while expected, will put pressure on the Japanese company to take other steps to increase the company’s value to its shareholders.
The Tokyo-based operator of 7-Eleven, Seven & i Holdings, said last month that it Unsolicited takeover proposal From Alimentation Coach-Tard.
In a letter to Couche-Tard released Friday, Seven&I said its board of directors, based on the recommendation of a committee of independent directors, concluded that the offer was not in the best interests of shareholders.
Seven&I said it found Couch-Tard’s offer “grossly undervalues our stand-alone path and the additional efficiencies we see to realize and unlock shareholder value,” wrote Stephen Dacus, who runs Seven&I. and is an outside director and chairman of the committee. .
Alimentation coach-tard runs More than 16,000 Couche-Tard and Circle K stores throughout North America and Europe. Seven and I sits on a huge network 85,000 storesMainly in Asia and the United States. Couche-Tard’s takeover of Seven&I will make it one of the world’s largest retail groups.
Couche-Tard offered to buy all of Seven & i’s outstanding shares for $14.86 each, according to the letter, slightly below where the shares were trading Friday morning. The price of Couche-Tard’s offer was not previously disclosed.
Seven&i said it believed the proposed purchase would trigger competition scrutiny from regulators in the United States, where Couche-Tard and Seven&i are the two largest operators of convenience stores. Koch-Tard could not immediately be reached for comment.
In Japan, 7-Eleven is considered something of a thing A national treasureAny foreign-led takeover makes it a long shot. Analysts questioned whether Couche-Tard would be able to manage 7-Eleven stores better than their current owner.
Any acquisition could also spark protests from government officials in Japan.
In recent years, an increasing number of Japanese companies have faced pressure To boost their market valuation from investors.
The decision to reject the buyout offer could further upset Seven&I investors who believe the company is worth more than its current market value.
Seven & i operates a number of businesses in Japan, including a supermarket chain. Activist fund ValueAct Capital Management is pushing Seven&I to focus on 7-Eleven stores, arguing they would be more valuable as a stand-alone company.
In the weeks since Couche-Tard’s bid was announced, 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 works to convince shareholders that it is taking steps to improve corporate value on its own. In its letter on Friday, Seven&I said it is “single-mindedly focused on delivering value for 7&i shareholders and other stakeholders.”
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