7-Eleven Parent Rejects Takeover Bid
Seven & i Holdings Co., Ltd, the parent company of convenience store chain 7-Eleven, has rejected a takeover bid from fellow convenience store operator Alimentation Couche-Tard Inc.
In a Sept. 5 letter to Alain Bouchard, company founder, and executive chairman of Couche-Tard's board of directors, Stephen Hayes Dacus, chairman of Seven & i's board of directors and chair of a special committee established to study the takeover bid, said the proposal is not in the best interest of Seven & i shareholders and other stakeholders.
“We are open to sincerely consider any proposal that is in the best interests of Seven & i shareholders and other stakeholders; however, we will resist any proposal that deprives our shareholders of the company’s intrinsic value or that fails to specifically address very real regulatory concerns,” Dacus wrote.
The rejection comes less than three weeks after Seven & i received Couche-Tard’s bid to acquire all outstanding shares of the company at $14.86 (U.S. dollars) per share in cash, totaling about $39 billion.
In the letter, Dacus outlined what he called several “critical reasons” his company chose not to further engage in discussions over the proposed deal.
“The special committee believes that (the) proposal is opportunistically timed and grossly undervalues our standalone path and the additional actionable avenues we see to realize and unlock shareholder value in the near- to medium-term,” he wrote. “The Seven & i business is a unique asset and strategically positioned within the global convenience store sector.”
Dacus also raised concerns that the proposal did not acknowledge the multiple and significant challenges such a transaction would face from U.S. competition law enforcement agencies in the current regulatory environment.
“Your proposal also does not indicate, for example, the timeline you believe would be required to clear regulatory hurdles, or whether you would be prepared to take all necessary action to obtain regulatory clearance, including by litigating with the government,” he said.
The third reason he cited was the role Seven & i plays in everyday life in Japan across food retail, banking, and other services. “This is clearly an area that would require further discussion should we reach that point,” he said.
