Couche-Tard drops $47 bil. bid to buy Seven-Eleven parent company
TOKYO, July 17 Kyodo - Canadian retailer Alimentation Couche-Tard Inc. said Thursday it has withdrawn its $47 billion buyout proposal for Japanese rival Seven & i Holdings Co. due to "a lack of constructive engagement," ending nearly a year of talks.
Seven & i, the Japanese operator of the Seven-Eleven convenience store chain, and Couche-Tard, operator of Circle K convenience stores, said in May they had signed a nondisclosure agreement to facilitate the exchange of information over the proposal.
But "there has been no sincere or constructive engagement from 7&i that would facilitate the advancement of any proposal," Couche-Tard said in a release Wednesday local time in Laval, Quebec.
"Based on this persistent lack of good faith engagement, we are withdrawing our proposal," the Canadian retailer said.
Seven & i said in a release Thursday that it had anticipated Couche-Tard's withdrawal. The Japanese company rejected the claim that it had not engaged in constructive talks, saying, "We have sincerely addressed" the proposal, including exploring ways to clear U.S. regulatory hurdles.
"Our company will continue to implement measures on its own to create value," Japan's biggest retail group said.
On Thursday, Seven & i shares briefly plunged over 9 percent to below 2,000 yen on the Tokyo Stock Exchange following Couche-Tard's announcement.
Seven & i said last year Couche-Tard initially proposed acquiring all outstanding shares for $14.86 per share. The price was raised to $18.19 per share, or around $47 billion, after the Japanese retailer opposed the initial offer.
While Seven & i made clear in March that it planned to pursue an independent path, a special committee of the Japanese company was examining the proposal as well as the option of going it alone from the perspective of maximizing shareholder value.
Due to concern that U.S. antitrust regulators could object to a deal, the companies were in talks over the potential sale of around 2,000 convenience stores located where their networks overlap in the United States.
Seven & i has the biggest market share in the U.S. convenience store market, followed by Couche-Tard.
Since the buyout proposal was made Seven & i has outlined a series of restructuring plans, including the sale of its supermarket business and a massive share buyback to boost its corporate value, in an apparent bid to fend off Couche-Tard's takeover attempt.
Stephen Hayes Dacus became Seven & i's first foreign CEO in May and the Japanese retail giant is also planning to list its U.S. 7-Eleven convenience store business unit in 2026.
The company has also said it will sell part of its shareholding in Seven Bank Ltd. to deconsolidate the banking subsidiary.
==Kyodo
