Seven & i Holdings Board Finds Couche-Tard’s Takeover Bid Inadequate

Investing.com — The board of Seven & i Holdings (TYO:3382) is set to inform Canada’s Alimentation Couche Tard (TSX:ATD) that its initial takeover bid is “inadequate,” according to media reports.

Citing sources close to the matter, reports indicate that a special committee established by Seven & i, which operates the 7-Eleven convenience store chain, will deem Couche-Tard’s offer insufficient while expressing concerns about regulatory implications of the deal.

After receiving feedback from the committee, Seven & i’s board of directors plans to send a letter to Couche-Tard responding to the offer as early as Friday, the reports indicate. It will reportedly argue that Couche-Tard’s bid wasn’t in the best interest of stakeholders and failed to consider possible hurdles posed by US competition law.

The Nikkei business daily, the first to report the news, added that Couche-Tard’s proposal included a plan to acquire all shares for under $15 per share in cash, translating to a total purchase price of approximately $40 billion. The offer was preliminary and not legally binding, according to Nikkei.

Seven & i stated that it does not comment on market rumors as a general policy, as reported by the Financial Times.

New Couche-Tard Chief Executive Alex Miller expressed in a post-earnings call that it looked forward to engaging in a constructive dialogue with Seven & i, as reported by Reuters.

In August, Seven & i disclosed having received an unsolicited, confidential proposal from Couche-Tard. The Canadian group, which oversees Circle-K convenience stores, described its offer as friendly and non-binding.

At that time, news of the bid—the largest-ever takeover of a Japanese company—resulted in a nearly 23% spike in Seven & i shares.

The offer reflects rising foreign interest in acquiring Japanese companies, largely attributed to updates in the country’s corporate governance laws, along with a weaker yen and low interest rates.