After a 20% price increase proposal was rejected, the Canadian retail giant once again launched an acquisition bid for 7-Eleven
Canadian retail giant Couche-Tard has once again launched a takeover bid for 7-Eleven's parent company, Seven & i, offering $47 billion, a 20% increase from the previous bid. This move comes after its acquisition proposal in August was rejected. Insiders have revealed that no substantial negotiations have taken place between the two parties. Seven & i had previously stated that Couche-Tard's initial offer significantly undervalued the company. Analysts point out that if this acquisition is successful, it will be the largest foreign company acquisition in Japanese history
What, rejected the acquisition? Another 20% increase!
After the acquisition invitation initiated by Couche-Tard, the Canadian retail giant (parent company of Circle K), was rejected in August, on October 9th, according to the Financial Times, the company once again launched an acquisition bid towards the parent company of the Japanese convenience store giant 7-Eleven, Seven & i Holdings (referred to as "Seven & i"), with a bid as high as $47 billion, a 20% increase from the previous offer.
Following the news, Seven & i's stock surged over 10% intraday, then narrowed the gains, closing up 0.28% as of October 8th.
Sources cited by the Financial Times indicated that after Couche-Tard sent a new non-binding acquisition proposal to Seven & i last month, the two sides did not engage in any substantive negotiations.
When Seven & i rejected the initial offer of nearly $39 billion from the company last time, it stated that it "seriously undervalued the company" and did not take into account the difficulties in obtaining approval from competition regulators in the United States.
Analysts pointed out:
"If Couche-Tard's acquisition offer is accepted, it will be the largest foreign company acquisition case in Japanese history. Couche-Tard, as the operator of the Circle K brand, combined with Seven & i, will create significant market influence."
An investor holding a large amount of Seven & i shares stated that if the company continues to resist Couche-Tard, the pressure will now shift to them:
"Given that the overall valuation has not increased significantly since the summer, the company needs to explain why it rejected this offer. The board's special committee needs to clarify more precisely what level of price or what conditions are needed to start serious negotiations."
It is reported that Seven & i is currently focused on the second-quarter results to be disclosed on Thursday, and is trying to prove "its ability to provide sufficient value to shareholders as an independent entity."
It is worth noting that Seven & i "has been exploring the possibility of selling non-core assets to private equity and other investors, and has accelerated plans to focus on the convenience store business. In addition, the company is also considering speeding up the sale of its stake in the financial services division Seven Bank, and selling its supermarket business."