Following the entry of a new player in the saga of Circle K parent Alimentation Couche-Tard Inc.’s attempt to acquire Seven & i Holdings Co. Ltd., the parent of 7-Eleven Inc., Artisan Partners International, a U.S.-based investor in Seven & i, has called on the company’s special committee to consider a bidding process that includes all competing acquisition proposals to secure the best offer.
Artisan Partners holds 1.11% of Seven & i shares. The fund is among Seven & i’s most vocal foreign investors that have urged the company to focus on its core convenience-store business, according to a Reuters report.
Couche-Tard in August submitted an acquisition proposal to Seven & i. Seven & i’s board formed a special committee of independent outside directors to review the offer. Seven & i has rejected the initial proposal twice, saying it “undervalues” the company. Couche-Tard has since raised its offer, from $14.86 per share or approximately $39 billion, to $18.19 per share or approximately $47.2 billion.
Seven & i has since announced a restructuring plan to spin off its noncore supermarket, food, specialty store and other businesses and to divest 444 underperforming “non-core” c-stores in North America to allow it to focus more on its convenience-store business.
These developments prompted Artisan Partners to send a letter in mid-October to the Seven & i board urging it to respond “without delay” to the enhanced acquisition bid, claiming that the restructuring plan is a tactic “designed to impede and drive away a bona fide bid.”
In a move also likely intended to block the takeover attempt by Couche-Tard, Seven & i is considering a management buyout with funding from banks, Itochu Corp. and the founding Ito family in a transaction that could be worth approximately $58 billion.
Seven & i confirmed that it has received a non-binding and confidential proposal to acquire the company from Junro Ito, vice president and a representative director of the company and Ito-Kogyo Co. Ltd., a private company affiliated with Ito. It did not disclose a price. The special committee is reviewing the proposal.
Artisan Partners also has responded to the management buyout proposal, as well as the second Couche-Tard bid.
“At this critical juncture, we urge the [Seven & i] board and special committee to ensure a fair, independent and transparent process to maximize shareholder value. Contingent upon such a process, we support both offers at this stage,” Ben Herrick, associate portfolio manager of the Artisan Partners International Value Team, said in a statement provided to CSP.
“To achieve the best outcome for shareholders, we call on the special committee to consider a formal bidding process, including an auction, to explore additional third-party interest and to secure the highest possible bid from all suitors. Furthermore, we strongly recommend that the board grant both parties equal access to conduct due diligence. Lastly, it is imperative for the board and special committee to act with a sense of urgency without further delay.”
Meanwhile, after months of delay, “preliminary and limited” talks between Seven & i and Couche-Tard are reportedly in motion concerning a deal.
7-Eleven is No. 1 on CSP’s 2024 Top 202 ranking of U.S. c-store chains by store count. Alimentation Couche-Tard is No. 2.
Tokyo-based Seven & i is a global operator of convenience stores, superstores, supermarkets, specialty stores, foodservices, financial services and IT services. 7–Eleven International LLC franchises or licenses more than 44,000 stores in 19 countries and regions, The brand also operates corporate or franchise stores in the United States, Canada, Mexico and Japan. Globally, the 7-Eleven trademark is represented in approximately 83,000 stores.
Irving, Texas-based 7-Eleven Inc. operates, franchises or licenses more than 83,000 convenience stores in 19 countries and regions, including more than 13,000 7-Eleven convenience stores in the United States.
Laval, Quebec-based Couche-Tard operates in 31 countries and territories, with more than 16,700 stores. Its network includes more than 7,100 stores in the United States under the Circle K and Holiday Stationstores banners, and approximately 2,100 in Canada under the Circle K and Couche-Tard banners.
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