Seven & i Holdings, the parent company of the internationally recognized convenience store chain 7-Eleven, has formally rejected a buyout offer amounting to $38.6 billion from Canadian convenience store operator Alimentation Couche-Tard. The proposed acquisition, priced at $14.86 per share, was perceived as a significant undervaluation of the company along with its growth prospects.
In a detailed response to the Tokyo Stock Exchange, Seven & i articulated that the offer did not align with the interests of its shareholders nor with the company’s long-term strategic goals. Stephen Dacus, the Chairman of the special committee formed to evaluate the bid, characterized it as “opportunistically timed” and not representative of the company’s considerable standalone value and its potential for future growth.
This rejection follows Seven & i’s recent announcement of a significant restructuring initiative aimed at expanding 7-Eleven’s worldwide footprint while divesting from less lucrative sectors, such as its supermarket businesses. Dacus noted that even a substantial enhancement to Couche-Tard’s current bid would be inadequate to navigate the anticipated regulatory challenges in the U.S. market.
Furthermore, the company emphasized that Couche-Tard has not laid out a clear strategy regarding the requisite asset divestitures and regulatory approvals that would be necessary for such a merger, highlighting the absence of a feasible timeline for these processes.
Seven & i remains receptive to any proposals that fairly represent the company’s actual value and that would effectively address the regulatory concerns, yet it will resist offers that may jeopardize shareholder value.
This stance has attracted the attention of market investors. Ben Herrick from Artisan Partners, a key shareholder, remarked on CNBC that the proposal underscored the necessity for more proactive measures to generate value from Seven & i’s management.
Despite the refusal, Seven & i Holdings reiterates its commitment to executing its strategic plan, with the intention of enhancing corporate value and providing higher returns for its shareholders.
