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Couche-Tard ‘disappointed’ after 7-Eleven owner rejects takeover offer


Alimentation Couche-Tard Inc. says it is “disappointed” in a refusal of its takeover offer by the Japanese owner of 7-Eleven and remains focused on reaching a deal.

In a news release Sunday, the Quebec-based convenience store operator argued its proposal offers clear strategic and financial benefits and it believes the two companies can reach a mutually agreeable transaction.

Seven & i said in a statement Monday that it remains open to talks if Couche-Tard puts forth a proposal that “fully recognizes Seven & i’s stand-alone intrinsic value” and addresses its regulatory concerns.

“As our board has previously discussed and stated, we do not believe that the proposal (Couche-Tard) put forward provides a basis for us to engage in substantive discussions regarding a potential transaction,” the company said.

On Friday, Seven & i said it was rejecting the takeover offer.

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In a letter to the Quebec company, Seven & i said that the takeover offer “grossly undervalues” the Japanese company, and said the proposal was not in the best interest of its shareholders and other stakeholders.

Seven & i called the offer of US$14.86 per share in cash opportunistically timed and raised concerns about regulatory approval for the deal.

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In its Sunday statement, Couche-Tard said it’s “highly confident” further discussions would lead to the ability to find increased value for Seven & i shareholders.

“Given the mutual benefits of a combination, we are disappointed in (Seven & i’s) refusal to engage in friendly discussions,” the company said.

The Quebec company added it has offered to enter a non-disclosure agreement to enable both sides to share further information, which was rejected.

Couche-Tard said in its release that it would jointly work together with Seven & i to secure regulatory approvals.

“Couche-Tard has a successful history and track record of acquisitions and working with U.S. and other regulators,” the Quebec company said, adding it believes it would address regulatory considerations in Japan as well.




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Couche-Tard said it remains focused on reaching a deal with Seven & i that is in the best interests of all parties.

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Analysts had previously raised concerns about whether a deal was possible due to the difficult task of satisfying Japanese regulators, which could force Couche-Tard to shed some of its assets.

But before the Japanese company’s rejection announcement Friday, Couche-Tard had said it was confident in its ability to finance and complete the proposed deal.

“We see a strong opportunity to grow together, enhance our offerings to customers and deliver a compelling outcome for the shareholders, employees and key constituencies of both companies,” CEO Alex Miller told analysts last Thursday on a conference call discussing the company’s latest earnings.

In a note Monday, RBC analyst Irene Nattel called the potential deal a “low probability event,” saying the situation is evolving as expected.

Couche-Tard currently operates across 31 countries, with more than 16,800 stores. A successful deal with Seven & i could add 85,800 stores to its network.

Seven & i owns not only the 7-Eleven chain, but also supermarkets, food producers, household goods retailers and financial services companies.


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