Circle K operator Alimentation Couche-Tard Inc. made a proposal to take over much larger rival and 7-Eleven owner Seven & i Holdings Co., in what would be the biggest foreign takeover of a Japanese company. A merger would create the world’s top operator of roughly 100,000 convenience stores.
A 7-Eleven convenience store, operated by Seven & i Holdings Co., in Tokyo, Japan on Thursday Jan. 18, 2024. Photographer: Noriko Hayashi/Bloomberg
Although Couche-Tard is smaller than Seven & i, with about 14,000 stores compared with more than 85,000 for the Japanese retailer, the Canadian company enjoys a bigger valuation of about $58.5 billion.
Seven & i has come under pressure from activist fund ValueAct Capital Management LP over perceptions that its assets could be worth more and to narrow its 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 Monday.
Couche-Tard’s balance sheet itself may not be strong enough to sustain a strong cash offer, said Mio Kato, an analyst at LightStream Research.
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