The operator of 7-Eleven has turned down an initial bid from the owner of rival convenience store chain Circle K, stating the offer undervalued its global business.
In a statement released Friday, Seven & I Holdings, the Tokyo-based parent company of 7-Eleven, emphasized its willingness to consider any proposal that aligns with the best interests of its shareholders.
However, it made clear that it would reject any offer that undermines the company’s intrinsic value or fails to address significant regulatory concerns.
Seven & I confirmed that Canada’s Alimentation Couche-Tard, which owns Circle K, made an offer to acquire all outstanding stock at a price of $14.86 per share in cash, valuing the potential transaction at $38.5 billion, according to a calculation by Reuters.
It was reported on Thursday that Seven & I might entertain a higher bid from its suitor. Since news of the offer broke last month, shares in Seven & I have surged, pushing its market capitalization beyond $38 billion.
If completed, the deal would represent the largest foreign-led acquisition in Japan since Dealogic, a financial analytics firm, began tracking data in 1995. It would also be the biggest cross-border takeover worldwide this year, according to Dealogic.
The offer has garnered significant attention in Japan, following recent government reforms that make it more difficult for companies to ignore unsolicited bids.
These changes in corporate takeover regulations are expected to encourage increased foreign investment in Japan.
A merger between the two companies would significantly enhance Couche-Tard’s already extensive presence across North America, where it operates Couche-Tard and Circle K stores, as well as in Europe, where it owns Ingo fuel retailers.
Analysts have noted that a combined entity would control almost 20% of the U.S. convenience store market, a factor that would likely draw scrutiny from American antitrust regulators.
Seven & I directly addressed these concerns in its Friday statement, asserting that the proposal did not sufficiently recognize the numerous and serious challenges the transaction would face from U.S. competition law enforcement in the current regulatory climate.
Seven & I operates over 83,000 stores globally, including 7-Eleven locations and the Speedway gas station chain in the United States.
In 2021, the company expanded its North American footprint by purchasing Speedway from Marathon Petroleum for $21 billion.
Although 7-Eleven originated in Dallas, Texas, its global expansion is widely attributed to the late Japanese entrepreneur Masatoshi Ito. Ito, who passed away last year at the age of 98, is credited with transforming 7-Eleven into an internationally recognized brand.
