Seven & i Holdings has rejected a takeover offer from Alimentation Couche-Tard, stating that the offer is not in the best interest of its shareholders and stakeholders. Couche-Tard had offered to acquire all outstanding shares of Seven & i for $14.86 per share, which was deemed opportunistic and undervaluing their standalone path. The company had announced a restructuring plan in April aimed at growing 7-Eleven’s global presence and divesting underperforming supermarket businesses. The proposal was criticized for not considering the challenges the takeover would face from U.S. anticompetition agencies.
The special committee formed by Seven & i to evaluate Couche-Tard’s proposal expressed concerns about regulatory hurdles, lack of details on divestitures, and insufficient timeline for clearance. The chairman of the committee pointed out the need for proposals that address real regulatory concerns and do not deprive shareholders of the company’s intrinsic value. Shareholder Ben Herrick from Artisan Partners criticized the management team and board for not maximizing the company’s corporate value. Herrick suggested that capital allocation overseas had been overlooked, and there are opportunities for growth in international licensees operating outside the United States.
Artisan Partners, holding a stake in Seven & i, urged the company to seriously consider the buyout offer and solicit offers for its Japanese subsidiaries. Herrick highlighted the mismatch between the company’s Japanese convenience store business and its international operating profit, calling for faster implementation of reform plans. On the other hand, Richard Kaye from Comgest disagreed with the need for radical reform by a foreign acquirer, praising Seven & i’s logistical and product innovation capabilities. Kaye emphasized the company’s strong performance and questioned the potential for significant improvements by an external entity.
Seven & i emphasized its commitment to considering proposals that benefit its stakeholders and shareholders while addressing regulatory concerns. The company’s rejection of Couche-Tard’s offer reflects its belief that the proposal undervalues its potential and does not account for the challenges in obtaining regulatory approval. The ongoing discussions and conflicting opinions from shareholders and analysts highlight the complexity of evaluating a potential takeover offer and the importance of balancing short-term gains with long-term value creation.
Moving forward, Seven & i will continue to evaluate opportunities for growth and value creation while navigating potential challenges in the regulatory landscape. The rejection of the takeover offer underscores the company’s confidence in its strategic direction and commitment to maximizing shareholder value. As the situation evolves, Seven & i will likely face further scrutiny from investors, regulators, and other stakeholders, requiring thoughtful decision-making and strategic planning to secure its future success in the global convenience store market.
