LAVAL, Que. – The Japanese owner of 7-Eleven says it has received a new management buyout proposal from a member of the family that helped found the company, offering an alternative to the takeover bid from Alimentation Couche-Tard Inc.
The proposal for Seven & i Holdings Co. Ltd. is being made by Junro Ito, who is a vice-president and director of the company, and Ito-Kogyo Co. Ltd., a private company affiliated with him.
Terms of the non-binding offer by Ito were not disclosed.
In a statement Wednesday, Seven & i said its special committee has been reviewing the proposal with its financial advisers.
Stephen Hayes Dacus, chair of the special committee and board of directors of the company, said the company is committed to an objective review of all alternatives as it considers the proposals from Ito and Couche-Tard as well as the company’s stand-alone opportunities.
“The special committee and the company board will continue to engage with all parties in a manner designed to maximize value and will continue to act in the best interests of the company’s shareholders and other stakeholders,” he said in a statement.
The company noted that Ito has been excluded from all discussions within the company related to the offer and the bid by Couche-Tard.
Quebec-based Couche-Tard made a revised offer for Seven & i last month after an earlier proposal was rebuffed by the Japanese firm because it was too low and did not fully address U.S. regulatory concerns.
It did not respond to a request for comment about Ito’s offer.
RBC Capital Markets analyst Irene Nattel said the latest development underscored her belief that a Couche-Tard deal with Seven & i is a “low probability event.”
“Assuming attractive pricing and a fully-funded transaction, the potential privatization from a friendly Japanese group would seemingly provide investors with the value creation event they seek,” said Nattel, adding that it would skirt potential competition issues in the U.S. and concerns around the foreign takeover of a core local entity for Japanese regulators.
Couche-Tard has argued its proposal offers clear strategic and financial benefits and has said it believes the two companies can reach a mutually agreeable transaction.
However, the Japanese company has said there are multiple and significant challenges such a transaction would face from U.S. competition regulators.
Couche-Tard operates across 31 countries, with more than 16,800 stores. A successful deal with Seven & i could add 85,800 stores to its network.
Seven & i owns not only the 7-Eleven chain, but also supermarkets, food producers, household goods retailers and financial services companies.
This report by The Canadian Press was first published Nov. 13, 2024.
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