Quebec Pension Fund Says It’s Ready to Back Couche-Tard in 7-Eleven Quest

A high-ranking executive at Quebec’s public pension manager indicated that the fund is likely to offer financial support to Alimentation Couche-Tard Inc. if it proceeds with a takeover bid for Seven & i Holdings Co., the parent company of the 7-Eleven chain.

“Couche-Tard knows that we will always accompany them in these endeavors if necessary,” said Vincent Delisle, head of liquid markets at Caisse de Depot et Placement du Quebec, during an interview.

However, he noted that the specifics of any potential deal remain unclear. “We lack so many numbers.”

Couche-Tard, the Canadian company that owns Circle K and various other convenience store and gas station brands, made an approach to Seven & i that valued the company at approximately $39 billion. The Japanese retailer rejected the offer, stating that it was insufficient to “engage in substantive discussions.”

Bloomberg News reported on Sept. 11 that Couche-Tard is contemplating enhancing its offer, but there has been no public movement on this front. Meanwhile, Seven & i has reached out to potential buyers for its Ito-Yokado stores and supermarkets as part of its restructuring efforts, according to sources familiar with the situation.

CDPQ is one of Couche-Tard’s largest shareholders, holding a significant 3.5% stake in the company, valued at C$2.4 billion ($1.8 billion).

“Performance generated there has been tremendous,” Delisle remarked. The shares have delivered an annualized return of over 27% over the past 30 years, including dividends, with the Caisse benefiting from this growth.

Delisle stated he has “no idea” how much his fund might contribute to finance a potential deal for Seven & i, but he noted that the firm has previously supported Couche-Tard through both equity and debt. “We have all the flexibility.” Charles Emond, CDPQ’s CEO, mentioned to Nikkei last month that the fund “could participate” in financing.

Couche-Tard repurchased approximately C$1.4 billion in shares from CDPQ during 2023 and 2024 as part of the pension manager’s periodic portfolio rebalancing. “That’s something that makes us even more ready to be there when companies make these big acquisitions,” Delisle added.

A Couche-Tard takeover of Seven & i would represent the largest foreign acquisition of a Japanese company, according to Bloomberg data.

Regardless of the outcome, Delisle noted, “it will give the global market an indication of how Japan really wants to open up and be seen as a source of investment flows or capital equal to what you’d find in Canada, the US, or Europe.” The Caisse manages C$452 billion in pension funds and other assets in Quebec.

Raymond James analyst Bobby Griffin suggested that the Japanese government’s recent openness to foreign direct investment “might have impacted the timing” of Couche-Tard’s approach, possibly encouraging them to consider it more seriously.

However, Couche-Tard and its founder, Executive Chairman Alain Bouchard, have kept their takeover strategy under wraps. Bouchard has pursued various approaches to Seven & i for deals over the past two decades. “I would be surprised if this came about very quickly,” Griffin commented.

Moreover, the company, which began with a single store in Quebec and has since made increasingly larger acquisitions, is known for evaluating multiple M&A opportunities at once—suggesting it could potentially emerge with a different deal for another target.

“Couche-Tard, in my experience, is a very methodical and disciplined company,” Griffin observed. “They’ve walked away from more deals than they’ve closed.”