TOKYO -- Seven-Eleven Japan Co. Ltd. said that it has extended its all-cash offer for the outstanding shares of 7-Eleven Inc. that it does not already own until midnight, New York City time, tonight, October 20.
Seven-Eleven Japan is continuing its discussions with the special committee of 7-Eleven Inc.'s board of directors and its advisors regarding the offer. There can be no assurances, however, that an agreement will be reached, it said, and it added that it reserves the right to withdraw the offer.
The extended offer remains [image-nocss] subject to the other terms and conditions set forth in the offer to purchase, dated Sept. 6, 2005, and amended Sept. 28, 2005, filed by Seven-Eleven Japan and its wholly owned subsidiary, IYG Holding Co. As of Oct. 18, 2005, 7-Eleven Inc. shareholders had tendered and not withdrawn approximately 452,274 shares.
In late September, as reported in CSP Daily News, a special committee of 7-Eleven Inc.'s board recommended that shareholders reject a buyout offer from majority owner Seven-Eleven Japan. The company said that the $1.2 billon tender ($32.50-per-share) offer was inadequate, andnot in the best interests of the shareholders.
Japan's largest convenience store operator, with more than 10,000 locations, Seven-Eleven Japan is 51% owned by Japanese retailer and Denny's franchisee Ito-Yokado. The company, already holds 72.7% of 7-Eleven Inc. There are about 32 million shares of 7-Eleven Inc. stock.
Seven-Eleven Japan said that in order to better compete in the market, 7-Eleven must boost investment in its merchandising, store renovation, distribution and logistics systems, and information systems. The increase in investment, however, is likely to result in lower growth and profitability for 7-Eleven in the short term, the company said. Seven-Eleven Japan also said it expects that taking 7-Eleven private would help achieve a better-governed group structure.
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