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Seven & i Holdings, the parent company of global convenience store chain 7-Eleven, has officially declined a $38.6 billion acquisition proposal from Alimentation Couche-Tard, the Canadian convenience store operator. The offer, valued at $14.86 per share, was determined to “grossly undervalue” the company and its growth prospects.
In a detailed response to the Tokyo Stock Exchange, Seven & i outlined why the proposal does not align with the best interests of its shareholders or the company’s strategic goals. Stephen Dacus, Chairman of the special committee formed to evaluate the offer, described the bid as “opportunistically timed” and not reflective of the company’s valuable standalone path and potential for future value creation.
The rejection follows Seven & i’s announcement of a comprehensive restructuring plan aimed at expanding 7-Eleven’s global footprint and divesting less profitable segments, such as its supermarket operations. Dacus expressed that even a substantial increase in Couche-Tard’s current offer would fall short of addressing the complex regulatory challenges anticipated in the U.S. market.
Furthermore, the company highlighted the lack of a clear strategy from Couche-Tard regarding the necessary divestitures and regulatory approvals needed to complete such a merger, emphasizing that no feasible timeline for these processes had been provided.
Seven & i remains open to exploring any proposals that genuinely reflect the company’s value and address the regulatory concerns but will resist any that compromise shareholder value.
The response has attracted attention from stakeholders within the investment community. Ben Herrick from Artisan Partners, a significant shareholder, expressed on CNBC that the proposal underscored a need for more proactive value enhancement strategies from Seven & i’s management.
Despite the refusal, Seven & i Holdings reaffirms its commitment to executing its strategic plan, aiming to enhance corporate value and shareholder returns effectively.
