Canadian convenience giant Alimentation Couche-Tard (ACT) has reaffirmed its interest in acquiring Seven & i Holdings (7&i).
Following 7&I’s open letter addressed to ACT in which it rejected the company’s $38 billion takeover proposal due to ACT “grossly undervaluing” the company and the regulatory challenges the bid would face, ACT has responded.
“We continue to have strong conviction that a combination with 7&i has clear strategic and financial benefits for both companies’ customers, employees, franchisees and shareholders. We believe that, working together, we can successfully reach and complete a mutually agreeable transaction.”
It said that together they would create a leading global retail platform with over 100,000 sites spanning Asia-Pacific, North America, Australia, and Europe.
ACT said it was disappointed in 7&i’s refusal to engage in friendly discussions, stating that the Japanese company rejected both requests to have its advisors engage in discussions aas well as entering into a Non-Disclosure Agreement (NDA).
“We remain ready and willing to enter into an appropriate NDA to advance friendly discussions. In addition to enabling Couche-Tard to find more value, engagement will also enable us to refine our regulatory proposal to sufficiently address deal certainty, as referenced in 7&i’s response letter.”
In response to 7&i’s concerns over regulatory approvals, ACT suggested the companies could jointly consider divestures that may be required to secure these approvals.
“Couche-Tard has a successful history and track record of acquisitions and working with U.S. and other regulators, in full compliance with applicable processes and requirements. The U.S. convenience store market is highly fragmented, with over 150,000 stores nationally.
“Both CoucheTard’s and 7&i’s stores operate in the U.S. in competition with a wide array of brick and mortar and online food and merchandise providers. Additionally, 7&i and Couche-Tard largely operate in complementary markets across the U.S.”
Following ACT’s statement, 7&i reiterated its point that it remains open to engaging in sincere discussions should ACT put forth a proposal that fully recognizes 7&i’s standalone intrinsic value and addresses the Special Committee’s very real regulatory concerns.
“As our board has previously discussed and stated, we do not believe that the proposal ACT put forward provides a basis for us to engage in substantive discussions regarding a potential transaction. This is precisely why we have not asked our advisors to engage in further discussions or signed an NDA.”
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