Couche-Tard's Bid for Seven & i Holdings Takes on New Life
TOKYO — A $58 million management buyout offer for 7-Eleven Inc.'s parent company Seven & i Holdings Co. Ltd. fell through on Feb. 27, increasing the chances that Laval, Quebec-based Alimentation Couche-Tard Inc. is successful in its pursuit of the global retailer.
Junro Ito, son of Seven & i founder Masatoshi Ito and a current vice president and representative director, and his company Ito-Kogyo Co. Ltd., withdrew the offer due to a lack of investors in the bid to take Seven & i private, reported Kyodo News.
Trading house and FamilyMart Co. owner Itochu Corp. announced the same day that although it had been "earnestly considering the request from the founding family for participation as a strategic partner in their acquisition proposal of Seven & i," it had "decided to terminate" its consideration of the matter.
Seven & i confirmed the withdrawal, noting that it had learned from Ito that "they have been unable to secure the financing required to submit a definitive proposal to acquire Seven & i. As a result, there is no actionable proposal from Mr. Junro Ito and Ito-Kogyo for Seven & i to consider at this time."
The company added that it remains committed to exploring all opportunities to unlock value for shareholders and is continuing to assess a full range of strategic alternatives, including the reported $47 billion bid from Couche-Tard.
Ito and Ito-Kogyo Co. reportedly sought loans and investments from bank and investment funds to help finance the buyout. However, Itochu — reportedly a key component of financing the buyout — concluded that the return on what would have been a $6.7 billion investment was insufficient, according to the news outlet.
This could improve Couche-Tard's odds of acquiring Seven & i, as the company can now accept the takeover bid or continue to move forward as an independent company. Last October, Seven & i announced plans to split into two business: one focused on 7-Eleven, other convenience stores and gas stations; and one consisting of a collection of 31 less profitable retail operations.
Even if the company accepts Couche-Tard's offer, it would still face numerous challenges, including antitrust concerns in the United States. In its latest announcement, Seven & i stated that the special committee it set up to evaluate the offer is "engaging constructively with Alimentation Couche-Tard to determine if an actionable proposal can be achieved that addresses the serious U.S. antitrust challenges that any such transaction would face."
Irving-based 7-Eleven operates, franchises and/or licenses more than 13,000 stores in the United States and Canada. In addition to 7-Eleven stores, it operates and franchises Speedway, Stripes, Laredo Taco Co., and Raise the Roost Chicken and Biscuits locations.
