Alimentation Couche-Tard Inc., the Canadian operator of convenience stores and gas stations, has reiterated its readiness to increase its acquisition offer for Seven & i Holdings Co., but only if the Japanese retailer engages in formal discussions. The founder and Chairman of Couche-Tard, Alain Bouchard, made the announcement during a press conference in Tokyo on Thursday, emphasizing that access to Seven & i’s financials could pave the way for a more attractive offer.
“We may be able to enhance our proposal through due diligence access to financials,” Bouchard remarked, underscoring that a more favorable deal could be on the table should the Japanese company consider entering negotiations. Bouchard was accompanied by CEO Alex Miller and CFO Filipe Da Silva in Tokyo, where they were actively promoting their multi-billion dollar bid to acquire the parent company of the 7-Eleven convenience store chain.
Couche-Tard, which owns the Circle K brand, put forward a fresh, yen-denominated non-binding proposal on January 24, aiming to purchase Seven & i for ¥7.39 trillion (approximately $50 billion). Based on the offer price of $18.19 per share, the deal would represent a significant premium over Seven & i’s current market valuation.
However, Bouchard expressed frustration over the lack of engagement from Seven & i’s leadership. “We have tried to arrange meetings. It’s been difficult. In fact, it’s been nearly impossible,” he said.
As part of its strategy to enhance its position, Couche-Tard launched a new website to reassure Japanese stakeholders and the public that it is not pursuing a hostile takeover, but rather a “friendly” acquisition. The company continues to advocate for the benefits its proposal would offer to Seven & i’s customers, franchisees, and shareholders alike, stressing confidence in the attractiveness of its offer.
Since Couche-Tard’s approach became public in August, Seven & i has been vocal about its intention to remain independent. The company has introduced major reforms, including the appointment of Stephen Dacus as CEO, the sale of its superstore division for $5.4 billion, a massive share buyback program worth ¥2 trillion, and a potential listing of its U.S. business. Despite these efforts, Seven & i’s stock remains more than 20% lower than Couche-Tard’s offer.
This week, Seven & i addressed potential regulatory concerns, announcing plans to divest over 2,000 stores as part of a strategy to clear any regulatory hurdles in the U.S. market. Among the proposed divestitures is the sale of Couche-Tard’s Circle K stores in the U.S., where the two convenience giants are the leading players. Combined, the two chains would have more than 20,000 outlets in the U.S., outpacing the nearest competitor, Casey’s General Stores, by a margin of 7.6 times.
Couche-Tard’s executives expressed optimism about obtaining regulatory approvals in the U.S., with CEO Alex Miller stating, “We believe there’s a clear path for regulatory approvals in the U.S.”
On a global scale, a merger would result in a massive retail conglomerate with more than 100,000 stores generating over $150 billion in revenue annually. Couche-Tard has secured backing from major financial institutions, including Goldman Sachs, Royal Bank of Canada, and Scotiabank, for the deal’s financing, with CFO Da Silva affirming that no financing conditions would be attached to the agreement.
Additionally, Couche-Tard’s executives sought to reassure stakeholders in Japan, insisting that there are no plans to close stores or lay off employees in the country.
The company is relying on support from Seven & i’s shareholders to exert pressure on the board to reconsider the offer. Artisan Partners Asset Management, which holds nearly a 1% stake in Seven & i, issued a statement calling on investors to hold management accountable. The asset manager criticized Seven & i’s leadership for years of poor performance, suboptimal capital allocation, and ongoing management entrenchment, urging shareholders to push for a more value-accretive acquisition.
Artisan also pointed to the resignation of two independent directors, Jenifer Simms Rogers and Elizabeth Miin Meyerdirk, on March 11, as indicative of dysfunction within the board. “The departure of these directors will only further compromise the board’s ability to function effectively,” the firm stated.
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