The nearly $60 billion proposed management buyout of Seven & i Holdings Co. Ltd. includes plans for an initial public offering (IPO) of its North American convenience store and gas station business to ease financing concerns, according to a Bloomberg report citing people with knowledge of the matter.
As the founding Ito family moves to formalize a proposal to counter the more than $47 billion offer by Alimentation Couche-Tard Inc., it is considering the IPO as the best way to quickly pay down loans that would be extended by three of Japan’s biggest banks in the buyout, the people told the news agency.
An IPO would raise more than $6.6 billion in cash to pay down part of nearly $40 billion in loans by Sumitomo Mitsui Financial Group Inc., Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. and any other institutions, said the report.
Seven & i intends to retain a stake in the business after any potential listing, the source said.
Representatives for Seven & i or the Ito family did not immediately respond to Bloomberg’s requests for comment.
Along with the previously announced separation of Seven & i’s domestic supermarkets and retail business, the company would effectively be split into three entities, the report said. The two others would consist of the 7-Eleven convenience stores in Japan and the North American 7-Eleven, Speedway and Stripes c-stores, which generated $70.3 billion in sales during the company’s latest fiscal year through February.
Couche-Tard in August submitted an acquisition proposal to Seven & i. The Seven & i board formed a special committee of independent outside directors to review the offer. It has rejected the initial proposal twice, saying the bid “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. Meanwhile, Seven & i also is considering the management buyout with funding from banks, Itochu Corp. and the Ito family.
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.
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.
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.
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