Seven & I Holdings Co, owner of Seven-Eleven Japan Co, offered US$1 billion to take 7-Eleven Inc private, saying investment needed for renovations might slow growth and pose great risks for minority investors.
Seven & I, which already holds 72.7 percent of the largest US operator of convenience stores, offered to pay US$32.5 a share, a 15 percent premium over 7-Eleven's closing price yesterday. The offer is open from Sept. 6 to Oct. 3.
Further investment needed for renovations and distribution systems "may result in lower growth and profitability" for the US unit in the short term, Seven-Eleven Japan said in a press release. The offer gives minority investors "an opportunity to avoid risks relating to such lower short-term growth and profitability."
Tokyo-based Seven & I began operations as a holding company yesterday, with control of the world's largest convenience store operator and Japan's second-biggest general merchandise chain, Ito-Yokado Co. The two were affiliates before the reorganization.
Seven & I plans to finance the buyout with its own cash holding, the company said in the statement.
7-Eleven said earlier this month its merchandise sales in July at US stores open at least a year rose 5.9 percent from a year earlier, on cold beverages and fresh food, following a 4.6 percent gain in the three months ended June 30.
Seven-Eleven Japan has more than 28,000 outlets around the world.
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