Japanese retail giant Seven & i rejects takeover bid from Canadian ACT

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A Seven Eleven convenience store in Yokohama, Japan, in August 2024 (AFP/Yuichi YAMAZAKI)

Japanese retail giant Seven & i Holdings, the target of a takeover bid by Canadian company Alimentation Couche-Tard (ACT), asked the latter on Friday to review its offer, considering the amount proposed to be undervalued.

The Japanese group, which has 85,000 stores worldwide, including the ubiquitous Seven Eleven convenience stores in many countries, “unanimously concluded (…) that the proposal is not in the best interests of 7&i shareholders,” it wrote in a letter to Canadians.

“We are open to sincere discussions if you present a proposal that fully recognizes our inherent stand-alone value (…) However, we do not believe, for several essential reasons, that the proposal you have presented constitutes a basis for us to engage in substantive discussions regarding a potential transaction,” the administrators continued in this letter.

On the Tokyo stock exchange, the Japanese group’s shares reacted very little to this announcement, remaining very close to stability (-0.30% at 01:40 GMT).

– Couche-Tard confident food –

In its letter, the Seven & i Holdings board said ACT’s offer was for $14.86 per share (€13.37), which is roughly in line with Seven & i’s market value of around $39 billion (€35.1 billion).

The Japanese group also points to regulatory concerns in this takeover proposal.

“Your proposal fails to adequately recognize the multiple and significant challenges that such a transaction would face from U.S. competition law enforcement agencies in the current regulatory environment,” the letter said.

At a press conference in New York on Thursday, ACT CEO Brian Hannasch expressed confidence, however, saying Couche-Tard could “even consider taking on more debt if necessary.”

“We have a strong and robust balance sheet,” Mr Hannasch was quoted as saying by Nikkei media.

This acquisition project announced on August 19, could be, if it goes through, the largest takeover of a Japanese company by a foreign group in several years.

It would create a distribution giant, with the 85,000 stores that Seven & i has in 19 countries and the 16,700 stores in 31 countries of Couche-Tard, including the Circle K brand.

At the time of the acquisition project, Seven & i Holdings explained that it had set up a group composed of independent directors within its management committee to study it.

But the Japanese giant is said to have also, according to press reports, asked the Japanese government to protect itself against this.

According to the Bloomberg agency, Seven & i is seeking to obtain protected status from the Japanese Ministry of Finance, which is granted in particular to companies present in sensitive sectors such as nuclear power or semiconductors.

Anyone wishing to acquire more than 10% of the shares of a Japanese company under this status must obtain prior approval from the Japanese government.

© 2024 AFP

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