NAIROBI, Kenya- In a bold move, Seven & i Holdings, the Japanese owner of the global convenience store giant 7-Eleven, has turned down a massive $38 billion takeover offer from Canadian competitor Alimentation Couche-Tard (ACT).
The deal, had it gone through, would have been the largest-ever foreign takeover of a Japanese company, but Seven & i Holdings Co has stated that the offer severely undervalues the company and comes with significant regulatory risks.
In a letter addressed to ACT, Seven & i’s special committee, led by chair Stephen Dacus, made it clear that the offer was not only “opportunistically timed” but also failed to reflect the company’s true value.
The committee pointed out that the bid of $14.86 per share was 20pc above the pre-offer share price, but still didn’t align with their long-term vision.
“We believe your proposal undervalues our standalone path and fails to account for the avenues we see to unlock shareholder value,” the letter read, emphasizing that the board remains open to considering a better deal.
The timing of the offer also raised eyebrows, given the current weakness of the Japanese yen against the US dollar, which potentially makes Seven & i more affordable to foreign buyers.
While the bid from ACT, the owner of the Circle K brand, could have doubled their footprint in the U.S. and Canada to over 20,000 stores, Seven & i flagged the potential legal hurdles.
The letter warned that U.S. competition law enforcement agencies would likely scrutinize the deal, posing a significant obstacle to its completion.
This isn’t the first time ACT has pursued an ambitious acquisition. In 2021, the company made a bid for French retailer Carrefour, only to have it blocked by the French government.
As a global player with about 17,000 stores across North America, Europe, and Asia, ACT’s goal of creating a 100,000-strong global convenience store chain could face similar pushback in this case.
With 7-Eleven’s 85,000 outlets spanning 20 countries, it remains the world’s largest convenience store chain.
A successful acquisition by ACT would have reshaped the global retail landscape and solidified their position as a convenience store powerhouse.
