Alimentation Couche-Tard has told Seven & I Holdings that it wants to work together to agree on a ¡°friendly¡± takeover, after the Japanese convenience store operator pushed back on the Canadian company¡¯s initial proposal.
Couche-Tard remains ¡°highly focused on consummating a transaction with Seven & I that is in the best interests of all constituencies,¡± the company said in statement that confirmed an earlier Bloomberg News report.
Seven & I shares rose 3.2% to ?2,200 in early morning trading in Tokyo on Monday, giving the company a market value of about ?5.7 trillion ($40 billion). That¡¯s slightly higher compared with Couche-Tard¡¯s initial proposal of about $14.86 per share. While Seven & I, the operator of 7-Eleven shops, rejected this as too low and fraught with regulatory risk, it signaled a willingness to consider a sweetened offer.
The back-and-forth between Seven & I and Couche-Tard signals a new phase in the potential deal, which would create a global convenience store behemoth with more than 100,000 stores and represent the biggest-ever foreign takeover of a Japanese company. It would also be a key test of whether the environment in Japan has become easier for mergers and acquisitions.
In its statement, Couche-Tard said it was ¡°disappointed¡± by Seven & I¡¯s refusal to engage in friendly discussions. ¡°In addition to enabling Couche-Tard to find more value, engagement will also enable us to refine our regulatory proposal to sufficiently address deal certainty,¡± the company said.
Previously, an attempt at such a transaction would have been dismissed as unlikely, given the protectionist tendencies of Japan¡¯s government and boards prioritizing stability over shareholder value. But new corporate guidelines have been issued to inject more vigor into corporate Japan through improved governance and protections for investors.
Couche-Tard said in its statement that it¡¯s confident it has sufficient capacity to finance a takeover of Seven & I in cash, and that it would work alongside the Japanese company to consider divestitures that may be required to secure regulatory approvals for any deal.
¡°We believe that, working together, we can successfully reach and complete a mutually agreeable transaction,¡± Couche-Tard said.
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