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(Bloomberg) -- Canadian convenience store operator Alimentation Couche-Tard Inc. will keep up “friendly and persistent” attempts to forge a deal to acquire Seven & i Holdings Co., saying that it has financing in place and sees a clear path to gaining antitrust regulatory approval in the US.
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“We remain focused on entering into these more fulsome discussions, and continue to be disappointed that engagement has been very limited, and focused only on the path to US regulatory approval,” Couche-Tard said in a statement on Tuesday.
Couche-Tard, which owns the Circle K brand, disclosed that it submitted a new, yen-denominated non-binding proposal in January, following its approach last year to purchase Seven & i for $18.19 per share, or about $47.5 billion. The only revision was to the price in Japanese currency, a spokesperson for Seven & i said.
Ever since Couche-Tard’s approach became public in August, the operator of 7-Eleven stores has sought to make a case for remaining independent. Seven & i announced last week sweeping changes, such as board director Stephen Dacus taking over as chief executive officer, the sale of its superstore business for $5.4 billion, a share buyback program worth ¥2 trillion and a listing of its US business.
This week, Seven & i said it presented several steps to address any regulatory hurdles, namely the divestment of stores, to be agreed upon before any potential deal. Those include finding a buyer for all of Couche-Tard’s Circle K stores in the US. Given that Seven & i and Couche-Tard’s convenience stores are the top two chains in the US, their combined number of more than 20,000 outlets would be 7.6 times bigger than their next competitor, Casey’s General Stores Inc.
“We firmly believe that the divested business will be a strong and extremely viable competitor in the U.S. and will attract interest from credible buyers,” Couche-Tard said.
Couche-Tard executives, including founder and chairman Alain Bouchard, will be in Tokyo this week to try and advance discussions with Seven & i. They plan to hold a news conference on Thursday to publicly present their case for buying the company.
The statement “makes clear that Couche-Tard is not ready to walk away despite the apparent preference of Seven & i to go it alone,” Royal Bank of Canada’s analyst Irene Nattel wrote in a note to clients. “At some point Couche-Tard will need to make a decision on whether to walk away, and resume the normal-course issuer bid and consider alternative M&A.”