Global convenience-store retailer Seven & i’s chief financial officer Yoshimichi Maruyama said on Wednesday that a special committee is still considering the acquisition proposal of rival c-store company Alimentation Couche-Tard and the management buyout proposal from Seven & i’s founding Ito family; however, the committee does not have enough information yet to make a decision.
In August, Couche-Tard submitted a proposal, $14.86 per share or approximately $39 billion, to acquire Seven & i, which has rejected the proposal twice, saying it “undervalues” the company. Laval, Quebec-based Couche-Tard in October then raised its offer to $18.19 per share or approximately $47.2 billion.
The company is also considering a management buyout with funding from banks, Itochu Corp. and the founding Ito family in a deal that could be worth more than $58 billion. The proposed management buyout includes plans for an initial public offering (IPO) of the North American c-store business to ease financing concerns.
“We are considering all options, and whether they are feasible,” Maruyama said during an online earnings briefing after the Tokyo-based parent of 7-Eleven Inc. reported quarterly results Thursday, according to the Financial Post. “Both proposals have hurdles to make an acquisition possible. We haven’t received details of those solutions, so the ball is on the side of those proposing buyouts.”
The special committee may make a decision as early as May, Maruyama said, according to a report by Nippon.com.
“As one scenario, we are working toward the general shareholders meeting in May while thinking about what is the best way,” Maruyama said.
It is the first time that a Seven & i official has publicly commented on the timing of the decision.
“The point is which choice will increase the corporate value and shareholder value the most,” Maruyama said.
He also mentioned the option of Seven & i seeking to grow on its own, without accepting any offer, the report said.
Seven & i’s operating profit declined 24% in the latest quarter on broader retail weakness despite some signs of recovery at its convenience stores in Japan and North America. Profit was ¥128.4 billion ($812.1 million U.S.) during the period that ended in November, compared with ¥169 billion ($1.07 billion) a year earlier. Analysts were projecting, on average, profit of ¥132 billion ($834.8 million). Sales came in flat at ¥3.03 trillion ($19.2 billion) yen.
The mixed results could make it harder to stave off investor pressure to engage with the takeover proposals, the Financial Post said.
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 is a global operator of 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.
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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