Management Buyout Consideration

By Ritsuko Shimizu

TOKYO (Reuters) – Japan's Seven & i Holdings is considering a management buyout (MBO) to go private, potentially valued up to $58 billion, according to Bloomberg News on Wednesday.

The Nikkei newspaper reported that the owner of 7-Eleven is exploring an MBO, estimating the deal's value at over 6 trillion yen ($39 billion).

A spokesperson for Seven & i stated that this information was not officially released by the company. Seven & i has faced pressure to enhance corporate value and shareholder returns after Alimentation Couche-Tard announced a takeover bid in August, aiming to create a dominant global convenience-store chain.

Couche-Tard has raised its offer to $47 billion, as sources have previously mentioned. Going private would enable Seven & i to retain its current management and alleviate shareholder pressure to divest assets, while also mitigating the risk of a takeover by Couche-Tard, the Canadian owner of Circle K stores.

Seven & i has begun discussions with banks to fund the buyout, with Sumitomo Mitsui, Mitsubishi UFJ, and Mizuho reportedly negotiating for a combined 6 trillion yen in funding, according to Bloomberg.

The founding Ito family and the trading house Itochu may also participate in the acquisition, as per Bloomberg's reports. Representatives from Mitsubishi UFJ and SMFG declined to comment, and there was no immediate response from Couche-Tard.

Trading of Seven & i shares was suspended in Tokyo after the news broke.

($1 = 154.73 yen)