Seven & i Holdings (SVNDY), the Japanese parent company of the 7-Eleven convenience store chain, has rejected a takeover offer from Canada’s Alimentation Couche-Tard (ATD).
In a filing with the Tokyo Stock Exchange, Seven & i Holdings said the takeover bid “is not in the best interest” of its shareholders as it grossly undervalues the 7-Eleven chain.
Laval, Quebec-based Couche-Tard had offered to acquire all outstanding shares of Seven & i for $14.86 U.S., valuing the company at $38.55 billion U.S.
Seven & i Holdings also noted in its regulatory filing that Couche-Tard’s proposal does not factor in the “significant challenges” the takeover would face from U.S. anticompetition regulators.
Tokyo-based Seven & i Holdings stated that it will reject any takeover offer that “deprives our shareholders of the company’s intrinsic value or that fails to specifically address very real regulatory concerns.”
This spring, Seven & i announced a restructuring plan that’s aimed at growing 7-Eleven globally as well as divesting its underperforming supermarket business.
Seven & i Holdings has been targeted by activist investors in recent months, with calls for the company’s chief executive to step down amid a prolonged underperformance of the stock.
The merged companies would have created the world’s top operator of convenience stores with more than 100,000 outlets, including the “Circle K” brand that Couche-Tard owns.
Couche-Tard currently runs about 14,000 convenience stores, mostly in Canada and the U.S. By comparison, Seven & i operates 85,000 7-Eleven outlets worldwide.
Seven & i gets three-quarters (75%) of its revenue from North America compared with only 25% in its home market of Japan.
Couche-Tard has been expanding outside of Canada through acquisitions in recent years.
So far in 2024, the stock of Alimentation Couche-Tard has declined 3% to trade at $75.41 per share.
