Global convenience store giant, Japan’s Seven & i Holdings, has received a reported US$31 billion takeover offer from Canada’s global convenience store giant, Alimentation Couche-Tard.
The Nikkei newspaper reported the offer on Monday, which, if it happens, would be the biggest foreign takeover of a Japanese company. Alimentation Couche-Tard has a market value of around C$80 billion. Seven’s shares leapt 22% in Tokyo on Monday to well above the US$31 billion level, at more than US$38 billion.
Seven & i, operator of the 7-Eleven convenience store chain, has set up a committee to scrutinize the proposal, including the valuation. Seven & i took control of the local 7-Eleven chain last December for a price of A$1.71 billion, and the purchase closed earlier this year.
Seven & i has come under pressure from US activist fund ValueAct Capital Management over perceptions that its assets are worth more than the market is saying. In reaction, Seven & i has taken restructuring measures and initiated a buyback after resisting efforts to oust Chief Executive Officer Ryuichi Isaka.
ValueAct previously pushed the Japanese retailer to narrow its business focus to 7-Eleven stores, saying that as a standalone listed company, the convenience store business could be worth as much as ¥8,500 per share. Seven & i shares closed at ¥2,161 on Monday (up more than 22%).
While best known for its 7-Eleven stores, the company’s operations also include Denny’s Japan restaurants, the Ito-Yokado supermarket chain, and its own bank. Globally, its empire spans 85,000 convenience stores, gasoline stations, and retail outlets.
Couche-Tard, with a market value of C$80 billion (US$58.5 billion), operates convenience stores globally under its own brand, as well as Circle K and Ingo. In 2020, Alimentation Couche-Tard tried to buy Ampol for A$8.8 billion, but the deal died because of the rapid onset of COVID-19 and subsequent lockdowns and social distancing, which slashed business turnover. The Canadian company said it would return, but it never did.