The company that owns Seven-Eleven, Seven & I Holdings, said on September 6 that it turned down a buyout offer from the Canadian chain Couche-Tard.
Seven & I Holdings board members said the deal could have been better for the company's shareholders.
Seven & I Rejects Couche-Tard's Offer
Couche-Tard's offer was set to be the most significant foreign buyout of a Japanese company ever. But Seven & I said the offer didn't reflect the company's worth.
The proposal suggested buying all shares of Seven & I at $14.86 each. This price was slightly below the trading value of Seven & I shares on Friday morning.
Even though Couche-Tard could have expanded its business in North America and Europe, Seven & I felt the offer didn't match its value.
The market worth of Seven & I has recently gone up to over $38 billion. This is getting more attention in Japan as the government makes it harder for foreign companies to buy Japanese companies.
Seven & I run about 85,000 stores worldwide, including many in Asia and the US. This makes 7-Eleven leading in the convenience store market.
Meanwhile, Couche-Tard runs over 16,000 stores in North America and Europe. According to NYT, if the deal proceeded, it would have combined two of the largest convenience store chains that could allow the control of nearly 20% of the US market.
Seven & I's Rejection May Lead to Pressure, Regulatory Concerns
The Japanese company's decision to reject the offer may lead to pressure from investors who believe Seven & I should focus on improving shareholder value independently.
Activist fund ValueAct Capital Management has been pushing Seven & I to focus on its 7-Eleven stores, arguing that they would be more valuable as an independent company.
According to CNN, experts raised concerns that a merger could attract criticism from US regulators, given the significant market share if the companies were combined. Seven & I addressed these concerns, saying that Couche-Tard's proposal did not properly consider the challenges of US competition law enforcement.
Seven & I, based in Tokyo, also owns Speedway gas stations in the US, which it bought for $21 billion in 2021. The company is dedicated to increasing shareholder value and is concentrating on its current business plans.
