In recent news, Seven & i Holdings has finally started discussions with Canada’s Alimentation Couche-Tard regarding a $47 billion takeover bid for 7-Eleven, after months of silence. This comes right after they received another buyout offer from members of their founding family.
The announcement of these long-awaited negotiations, along with a new potential bidder stepping in as a white knight, has sparked excitement around a deal that could significantly impact Japan’s corporate mergers and acquisitions landscape.
The Canadian firm has shown interest in acquiring the world’s largest convenience store chain for over twenty years now. Their formal proposal was made public in August and would mark Japan’s largest takeover if it goes through.
Initial talks between advisors from both companies have reportedly begun, according to three sources familiar with the matter.
However, while these discussions are just getting started, Seven & i announced on Wednesday that they have also received an alternative proposal led by members of the Ito family—the company’s founders. They referred to this new offer as confidential and non-binding in their notice to the Tokyo Stock Exchange.
This proposal comes from Junro Ito—one of the founder’s sons and currently a vice president at Seven & i—along with Ito Kogyo, which represents other family members. This marks their first move as potential white knights amidst Seven & i’s resistance against Couche-Tard’s bid.
Although specific figures haven’t been shared publicly yet regarding this new offer, insiders indicate that it might involve unprecedented borrowing levels from Japan’s leading banks alongside equity investments from domestic firms. Currently, Ito Kogyo holds an 8.2% stake in Seven & i according to their website.
Itochu—one of Japan’s major trading companies and already owner of Family Mart—is reportedly involved in discussions about this new buyout proposal too; however, they have not commented on any specifics yet.
Industry experts believe that if Itochu were to take ownership of Seven & i eventually, it would mean controlling over 65% of Japan’s convenience store market by sales—a significant challenge indeed! Mitsui & Co., another trading house without any convenience store holdings so far, has also been mentioned in connection with a possible offer but hasn’t confirmed any involvement either.
The new proposal from the Ito family is currently being looked at by a special committee from Seven & I.
This committee is also reviewing Couche-Tard’s bid, which was bumped up to $47 billion in September after their initial unsolicited offer of $39 billion was turned down for not valuing the Japanese company properly.
Stephen Dacus, who chairs both the special committee and the board of directors, mentioned in a statement on Wednesday that they are dedicated to thoroughly evaluating all options available to them.
This includes considering proposals from Mr. Ito and Ito Kogyo, as well as exploring ways for the company to enhance shareholder value on its own.
Interestingly, recent comments from four insiders suggest that the founding family is quite against letting Japan’s largest retailer fall into foreign ownership and has been actively looking for a local buyer.
As for Couche-Tard, they haven’t responded yet when asked for comments, and we couldn’t get in touch with the Ito family either. Seven & i chose not to provide any updates on these discussions.