Canadian retailer Alimentation Couche-Tard (ACT) announced Sunday evening its intention to continue its attempt to acquire its Japanese competitor Seven Eleven, owner of 85,000 stores worldwide, despite the rejection of its initial offer. On Friday, Japanese retail giant Seven & i Holdings rejected an initial offer deemed “grossly undervalued” et “opportunistic”.
“We remain very focused on completing a transaction with 7&i that is in the best interests of all stakeholders.”ACT said in a statement released from Montreal. “We are very confident in our ability to finance the transaction in cash”added the Canadian group, which believes it has no financing problems. “Given the mutual benefits of a union, we are disappointed by 7&i’s refusal to engage in amicable discussions. We believe that by working together, we can reach a mutually acceptable transaction.”added ACT.
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Regulatory concerns
If the deal goes through, it would create a retail giant, with the 85,000 stores owned by Japan’s Seven & i, the operator of 7-Eleven convenience stores, in 19 countries, and Couche-Tard’s 16,700 stores in 31 countries, including the Circle K brand. It would also be the largest foreign acquisition ever made by a Japanese company, valued at around 35 billion euros ($39 billion).
In its rejection letter to Canadians, Seven & i Holdings had indicated that ACT’s offer was $14.86 per share (13.37 euros), which is roughly in line with Seven & i’s market value. But in addition to the price, the Japanese group also pointed to regulatory concerns. “Your proposal fails to adequately recognize the multiple and significant challenges that such a transaction would face from U.S. competition law enforcement agencies in the current regulatory environment.”the Japanese group argued in the letter.
