The proprietor of 7-Eleven reveals that the clan behind its establishment is struggling to obtain substantial financial backing for a takeover.
"At present, 7&i hasn't received a concrete proposal from Mr. Junro Ito and Ito-Kogyo that warrant consideration," the company stated. "Despite this, 7&i stays devoted to exploring opportunities to boost shareholder value and assesses a wide array of strategic alternatives, including the proposal from Alimentation Couche-Tard."
Itochu, a prominent Japanese trading house, declared they'd ceased considering joining the Seven & I founding family's buyout proposal.
This setback increases the probability of Couche-Tard securing a massive acquisition of one of Japan's renowned and beloved retailers, which operates 7-Eleven convenience stores.
Couche-Tard reiterated their intention to reach an amicable transaction agreement with Seven & i.
As a result, 7&i witnessed a 12% drop in Tokyo trading, marking its largest single-day decrease since transitioning to a holding company in 2005. Conversely, Itochu shares saw a surge of up to 6.8%.
Couche-Tard's $47 billion bid for Seven & I is one of the most notable instances of international interest in Japanese assets in recent times. Japan's emergence from deflation and improvements in corporate governance have drawn more investors to a previously untouchable market for foreigners.
Following receipt of a takeover offer from Couche-Tard last year, Seven & I's founding family commenced discussions for a private buyout, which would have set a record for the largest management buyout if successful.
Initially, Couche-Tard put forth a $38.5 billion offer, but they elevated it to $47 billion after Seven & I dismissed the initial bid.
Enrichment Insights:
- Proposal Status: Despite the rejection of two buyout bids in 2024 by Seven & i from Alimentation Couche-Tard, the Canadian convenience store operator has shown continuous interest in acquiring Seven & i[3]. However, the latest development is the withdrawal of the founding family's buyout plan, which might affect future negotiations[1].
- Impact on Stock Prices: The rejection of the buyout bids and uncertainty surrounding future negotiations have significantly influenced Seven & i's stock prices. Recently, a 12% plunge in Seven & i shares was observed after the management buyout was scrapped[3]. This volatility reflects investors' uncertainty about the company's strategic direction and potential partnerships.
In light of Itochu's decision to abandon the buyout proposal, the likelihood of Alimentation Couche-Tard securing a significant acquisition of Seven & i increases substantially. Seven & i's governance structure now faces potential changes due to the withdrawal of the founding family's private buyout plan. The recent drop in Seven & i's stock price by 12% serves as a clear indication of investors' concerns about the company's future.
