The Japanese owner of 7-Eleven has rejected a $38 billion takeover proposal from Canadian convenience chain Alimentation Couche-Tard (ACT).
In a letter addressed to the prospective buyer, Stephen Dacus, Chair of the special committee that Seven & i Holdings (7&i) formed to consider the offer, said the proposal “grossly undervalues” the company and would face regulatory challenges.
“…we will resist any proposal that deprives our shareholders of the company’s intrinsic value or that fails to specifically address very real regulatory concerns.”
However, Dacus stated the company would still consider a proposal that is in the best interest of its shareholders.
“We are open to engaging in sincere discussions should you put forth a proposal that fully recognises our standalone intrinsic value and addresses our concerns regarding certainty of closing in the current regulatory environment.”
ACT’s initial offer was to acquire all outstanding shares of 7&i for US$14.86 per share in cash, which gave the company a valuation of AUD $38 billion.
In the letter, Dacus stated that even if ACT was to significantly improve the offer, there is still the issue of regulatory approvals.
“…your proposal does not adequately acknowledge the multiple and significant challenges such a transaction would face from U.S. competition law enforcement agencies in the current regulatory environment and provides no certainty to closing.”
7-Eleven has 85,800 stores globally, employing over 157,177 employees, with a presence across Asia, North America, and other markets.
ACT currently operates in 31 countries and territories, with over 176,000 stores, and is one of the largest independent convenience store operators in the US with its Couche-Tard and Circle K banners.
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