Canadian retail chain Alimentation Couche-Tard Inc is dropping its proposal to acquire Seven & i Holdings Co, the Japanese operator of the 7-Eleven convenience store chain, citing frustration in ongoing negotiations that showed “a lack of constructive engagement.”
The 7-Eleven parent company rejected an offer last year, but Couche-Tard, which runs the global Circle K chain, was still interested and tried to coax a deal with the Japanese chain, known in Japan as “conbini.”
In a letter dated on Wednesday and sent to the Seven & i board, Couche-Tard stressed it had made a good offer earlier this year in a proposal of ￥2,600 (US$17.49) per ordinary share in cash, which it said represented a 47.6 percent premium to the stock price. The initial offer, made last year, was for ￥2,200 per share in cash.
Photo: AFP
In the letter, sent to media Thursday and signed by its two top executives, including founder Alain Bouchard, Couche-Tard expressed exasperation at the response it was getting from Seven & i despite repeated attempts at dialogue.
“We have been very patient and respectful throughout this process, beginning with our meeting on July 23, 2024,” the letter said.
“You have engaged in a calculated campaign of obfuscation and delay, to the great detriment of 7 & i and its shareholders. We believe this approach reinforces our concerns about your approach to governance. Based on this persistent lack of good faith engagement, we are withdrawing our proposal,” it said.
Couche-Tard, which runs nearly 17,000 stores in more than 30 countries and territories, including the US, said the documents it got lacked key information, executives were no-shows at meetings and the meetings it did have ended up being “readouts” of statements, not frank discussions.
Seven & i acknowledged the dropped offer Thursday and said it considered talks “in good faith and constructively.”
“We remain fully committed to our standalone value creation plan, which we have been pursing in parallel, and to unlocking the value of our businesses, including our North American convenience store business. Our plan is concrete and actionable,” it said in a statement.
The 7-Eleven franchise, which spans more than 85,000 stores in Japan, the US and Europe, has a new chief executive, Stephen Hayes Dacus, the first foreigner tapped to head 7-Eleven. Dacus, an American whose mother is Japanese, has promised a leaner business by focusing on the supply chain and tailoring shop offerings to various regions.
For the first quarter of this fiscal year, Seven & i reported a doubling in profits to ￥49 billion, mainly due to previously announced sales of property and equipment at its Ito-Yokado Co retail chain.
Quarterly sales held up, as a favorable exchange rate helped some overseas earnings, it said.
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