7-Eleven owner rejects $38 billion takeover offer

7-Eleven’s parent company, Seven & i Holdings SVNDYhas REJECTED a $38 billion (£29.2 billion) takeover bid from Canadian convenience store operator and competitor Alimentation Couche-Tard ACT (ACT).

Seven & said in a letter published on Friday that it is open to “sincerely” considering any proposal that benefits shareholders and stakeholders. However, the company said that the current offer “rough” undervalues ​​its intrinsic value and growth potential.

Seven & i chairman Stephen Dacus criticized the takeover bid as “opportunistically timed” and stressed the company was only interested in offers that could “unlock shareholder value”.

Dacus added that Seven & i is “confident” that its planned strategies, particularly those involving its US business, will effectively enhance shareholder value.

According to Dacus, the proposal does not address the significant regulatory hurdles posed by US competition law. He said the tender did not have details on how to overcome these hurdles. Moreover, Couche-Tard has not made clear whether it is prepared to engage in legal battles to gain regulatory approval.

While Couche-Tard acknowledged the importance of Seven & i in Japan, particularly in areas such as food retail and banking, Dacus noted that these issues would require further discussion if negotiations were to move forward.

If the deal were to proceed, Couche-Tard’s presence in North America would expand substantially. The Quebec retailer has approx 16,800 locations globally. Meanwhile, 7-Eleven boasts a footprint of approx 85,000 stores in 20 countries and territoriesmaking it the largest chain store in the world.

Although Seven & i preferred to keep the details of the proposal confidential, the company decided to make the letter public in order to maintain transparency with shareholders.

In April, the Japanese retail giant hinted at a potential IPO of its supermarket businesswith the aim of growing its convenience store division. That segment, which includes 7-Eleven, specializes in online shopping for groceries and everyday items such as lunch boxes, books and games.