This is probably not the last episode of the series. The Japanese Seven & i Holdings, owner of the 7-Eleven convenience stores (85,000 stores in around twenty countries), plans, according to the economic daily Nikkei, to buy back its own shares and leave the Stock Exchange, in order to escape an attempt takeover by its Canadian rival Couche-Tard. In the wake of this press information, the group's stock soared by almost 17% on Wednesday on the Tokyo Stock Exchange. Around 7:00 a.m. in Paris, the stock climbed 16.7%, to 2,599 yen.
As a reminder, the group had rejected at the beginning of September a first takeover proposal by Alimentation Couche-Tard (ACT), which it considered undervalued. But the Canadian distribution heavyweight then presented an improved offer which valued the Japanese group at $47 billion, enough to attract certain shareholders.
To escape lust, Seven & i “intends to become an unlisted company, as a countermeasure” to attempts to take external control, explained the economic daily Nikkei, citing sources close to the company.
If the Japanese company buys all the available securities, “ she anticipates that the total amount will be of a similar scale to that ACT projected”specifies the newspaper, according to which it would be the largest operation of this type (called MBO for “management buyout” in English) never carried out in Japan.
Still many obstacles
However, “Many obstacles will need to be overcome before it becomes a reality, including whether other investors, including the group's founding family, will participate and whether financial institutions will agree to provide the massive loans that this will require”warns the Nikkei. The project “is at a preliminary stage”he notes.
Couche-Tard wants to get its hands on the entirety of its Japanese rival Seven & i
Bloomberg News also reported on the Seven & i project on Wednesday, reporting that it could represent up to 9,000 billion yen, much more than the group's current market capitalization (5,700 billion yen). According to the financial agency, the Ito founding family and the Itochu investment company could join in the securities buyback operation, as well as three major Japanese banks (Sumitomo Mitsui, MUFJ, Mizuho).
Without confirming this information, Seven & i indicated this Wednesday that it had received a “ proposition d’acquisition », not legally binding, on the part of Ito-Kogyo, the Ito family firm which already owns 8% of the shares. A special committee reviews this proposal carefully and thoroughly with its financial and legal advisors », Specified the Japanese distribution giant in a press release. “ No decision has been made regarding the continuation of a transaction with (…) Ito-Kogyo, Alimentation Couche-Tard or any other party, there is no guarantee that any such transaction will be completed “, however, insists the group.
7-Eleven, the world's largest convenience store chain
Under pressure to boost its profitability after having rejected the takeover offer by Couche-Tard, Seven & i assured its shareholders on October 24 that it could almost double its turnover by 2030, in particular thanks to increased expansion at the international. “There are countries that we have not yet reached (…) We have enormous growth potential in the global market by continuing to expand our network” assured Ryuichi Isaka, president of the group, at the end of October, according to comments reported by the Kyodo agency
But the Japanese giant is also counting on an ambitious restructuring to strengthen its position: it has announced that it wants to concentrate on its 7-Eleven convenience stores, the heart of its activity, by creating a separate unit for its other subsidiaries (bank, Ito-Yokado supermarkets, sales online…).
7-Eleven is the world's largest convenience store chain. A quarter of them are in Japan, where these omnipresent convenience stores sell take-out meals as well as concert tickets and offer services (ATMs, bill payment, photocopier, etc.).
(With AFP)
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