Canadian retail stops 47 billion offer for 7-elves

Canadian retail stops 47 billion offer for 7-elves

The Canadian retailer Alimentation Couch-Tard withdrawn its $ 47 billion on Thursday, difficult offer to acquire Seven & I Holdings. The reason for this was the lack of a constructive dialogue on the part of the Japanese retailer.

end of a potential takeover investment

This surprising step ends, which could have been the largest foreign takeover of a Japanese company. With this acquisition, the operator of Circle K, Couche-Dard, pursued the goal of creating a global giant in the area of Convenience Stores behind which the 7-Eleven brand is located.

Criticism of a lack of cooperation

In a letter to the board of directors, couch-hard-out: "There was no serious or constructive commitment of 7 & I, which would have made it easier to progress any proposal, contrary to the public statements of representatives of the company." Furthermore, it was said: "Rather, they have carried out a calculated campaign of covering and delay, which causes significant damage to the shareholders of 7 & i."

reactions of Seven & I and the markets

SEVE & I reacted in a statement and regretted the decision of Couche-Tard: "Although we are disappointed with the decision of ACT and do not agree with the numerous false representations, we are not surprised."

Seven & i is considered a test case for the openness of the Japanese economy towards foreign takeovers. Couche-Dard was withdrawn after Nippon Steel successfully acquired US Steel in a controversial transaction over $ 14.9 billion. As a result, the shares of Seven & I fell by 9 %.

investor opinions and future plans

Manoj Jain, co-founder and co-cio of the Hong Kong company Maso Capital, was disappointed with the lack of willingness to cooperate on the part of Seven & I: "We believe that in a combination, considerable value can be realized and have presented this concern to management and the board."

Couch-Tard increased its offer to around $ 47 billion and offered to increase the offer in March, provided that the Japanese company cooperated and revealed further financial information. Couch-Dard also worked on a sales plan for shops to reduce some regulatory hurdles.

alternative suggestions and future strategies

Couchen-Tard was convinced that a complete merger of the two companies would maximize the shareholder value, but also had checked alternative options. The retailer proposed to take over all business of 7 & I outside of Japan and 40 % of the business in Japan, where Convenience Stores play an important role as an infrastructure during natural disasters.

"We are unable to pursue this combination effectively without a deeper and real commitment of the leadership of 7 & I and the special committee," the letter says.

Future of Seven & I

SEVE & I suggested selling his international business to Couchen-Dard to receive a participation in the Canadian retailer in return. However, such a business would not realize the considerable surcharge that its shareholders were offered in our transaction proposals, ”emphasized Couchen-Tard.

Seven & I, whose first foreign CEO, Stephen Dacus, took up his role in May, sees intensive pressure exposed to improving the weak yields and proving that the company can grow independently. "We remain fully committed to our independent value creation plan, which we are following in parallel," said Seven & i.

The retailer announced a share buyback program, does not sell assets that are necessary for operational assets and plans to list its North American Convenience Store business. An investor at Seven & I, who wanted to remain anonymous, commented: "It shows that you can delay the process in order not to be taken over. In view of the long duration of the process of couchen, I cannot imagine that someone else will give a bid."