Seven & i Holdings, the company behind the global convenience store brand 7-Eleven, has officially turned down a $38.6 billion buyout offer from Alimentation Couche-Tard, a convenience store operator based in Canada. The proposal, priced at $14.86 per share, was seen as significantly undervaluing the company and its future growth potential.
In a comprehensive reply to the Tokyo Stock Exchange, Seven & i explained why this proposal does not serve the best interests of its shareholders or align with the firm’s strategic objectives. Stephen Dacus, Chairman of the special committee appointed to review the offer, described it as “opportunistically timed” and not indicative of the company’s significant standalone potential and its capacity for future value enhancement.
This rejection comes in light of Seven & i’s recent announcement of a thorough restructuring plan designed to broaden 7-Eleven’s global presence and shed less profitable sectors, including its supermarket operations. Dacus mentioned that even a major increase in Couche-Tard’s current offer would not be sufficient to tackle the regulatory hurdles expected in the U.S. market.
In addition, the company pointed out that Couche-Tard has not provided a clear plan for the necessary asset sales and regulatory permissions needed to finalize such a merger, stressing that no realistic timeline for these steps has been given.
Seven & i is open to considering any offers that accurately reflect the company’s true worth and can address the regulatory issues, but it will oppose any proposals that could undermine shareholder value.
This response has drawn interest from investors in the market. Ben Herrick from Artisan Partners, a major shareholder, stated on CNBC that the proposal highlighted the need for more proactive strategies to enhance value from Seven & i’s management.
Despite the rejection, Seven & i Holdings reaffirms its dedication to implementing its strategic plan, aiming to effectively improve corporate value and returns for its shareholders.
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