7-Eleven owner rejects Couche-Tard’s takeover offer

The Japanese parent company of 7-Eleven, Seven & i Holdings Co. Ltd., has declined a takeover bid from Quebec-based Alimentation Couche-Tard Inc.

Seven & i described the offer from the Canadian convenience store operator as significantly undervaluing the company. In a letter to Couche-Tard, the Japanese company labeled the cash offer of US$14.86 per share as "opportunistically timed" and stated that it was not in the best interest of its shareholders and other stakeholders.

Stephen Dacus, chair of the special committee reviewing the offer, wrote, “We are open to engaging in sincere discussions should you put forth a proposal that fully recognizes our stand-alone intrinsic value and addresses our concerns regarding certainty of closing in the current regulatory environment.” However, he added, “We do not believe, for several critical reasons, that the proposal you have put forward provides a basis for us to engage in substantive discussions regarding a potential transaction.”

Seven & i also expressed concerns that the offer did not fully consider the significant hurdles the transaction would likely encounter from U.S. competition regulators.

In addition to its global 7-Eleven chain, Seven & i owns a variety of businesses, including supermarkets, food producers, household goods retailers, and financial services companies.

Before Seven & i's rejection on Thursday, Couche-Tard expressed confidence in its ability to finance and close the proposed deal. However, analysts have raised doubts about whether the companies can come to an agreement, citing potential challenges in satisfying Japanese regulators, which may require Couche-Tard to divest some of its assets.

Couche-Tard operates across 31 countries with over 16,800 stores. If the deal were successful, it would add 85,800 stores to its portfolio.