Alimentation Couche-Tard Inc. could increase its offer to acquire rival global convenience-store retailer Seven & i Holdings Co. Ltd., but only if the Tokyo-based company engages in talks, Couche-Tard executives said during a news conference held in Tokyo today to make a case for the transaction, Bloomberg reported.
The executives included founder and chairman Alain Bouchard, CEO Alex Miller and CFO Filipe Da Silva.
“We may be able to enhance our proposal through due diligence access to financials,” Bouchard said at the press conference. But he expressed disappointment at the lack of engagement with Seven & i so far. “We have tried to have meetings. It’s hard. Actually, it’s not possible,” he said.
Last August, Couche-Tard submitted a bid of $14.86 per share or $39 billion to acquire Seven & i, which rejected the proposal twice, saying it “undervalues” the company. Couche-Tard in October raised its offer to $18.19 per share or $47.2 billion. A $58 billion management buyout with funding from banks, trading company Itochu Corp. and the founding Ito family fell apart in late February with the withdrawal of Itochu.
“Couche-Tard is committed to strengthening 7-Eleven Japan while ensuring stability, investment and growth,” the Laval, Quebec-based company said. “With a proven track record, financial strength and respect for local leadership, we bring a trusted partnership that enhances franchisee success, supports communities and aligns with Japan’s long-term economic goals.”
Couche-Tard is committed to a transaction and has made a “clear, actionable proposal” that provides more value to shareholders than Seven & i’s current plan, which includes a leadership change, non-core asset sales and a U.S. initial public offering (IPO), the executives said in a presentation that accompanied the press conference.
Couche-Tard also sees a clear path to obtaining U.S. regulatory approvals, a key issue for Seven & i. It has a long history of working with regulators to agree on appropriate remedies and measures, it said.
The United States is a large and highly competitive market with more than 150,000 convenience stores. Couche-Tard, primarily under the Circle K brand, and Seven & i, primarily under the 7-Eleven and Speedway brands, operate in “largely different and complementary markets.”
Also, Couche-Tard has identified a potential divestiture package in collaboration with Seven & i, and that divestiture process is underway, it said.
It also has committed to a “large” termination fee to ensure it would be highly motivated to complete the transaction.
Couche-Tard has also launched a new website, www.growingseven.com, to provide stakeholders, particularly in Japan, additional insights into “creating a global convenience champion,” including Couche-Tard's approach to customers, employees, franchisees and local communities.
“It is time for Seven & i to engage in more fulsome, good-faith discussions,” Couche-Tard concluded.
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.
Seven & i, Tokyo, operates convenience stores, superstores, supermarkets, specialty stores, foodservices, financial services and IT services. 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 and Canada.
Alimentation Couche-Tard, Laval, Quebec, operates in 31 countries and territories, with more than 16,700 stores. Its network includes more than 7,100 stores in the United States, primarily under the Circle K banner.
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