Tokyo (AFP) – Shares in the Japanese owner of 7-Eleven surged Wednesday following reports that Canada’s Alimentation Couche-Tard (ACT) had hiked its takeover offer by almost 20 percent. Japan’s biggest retailer Seven & i last month rejected ACT’s initial offer, saying the $40 billion proposal undervalued its business and could face regulatory hurdles. If realised, it would be the biggest-ever foreign buyout of a Japanese firm.
But Bloomberg News and Japan’s Nikkei business daily reported Wednesday that ACT, which owns the Circle K brand, had upgraded its offer to $18.19 per share, or a total of around seven trillion yen ($47.2 billion). Shares in Seven & i jumped nearly 12 percent in early trade, before settling at up 4.7 percent by mid-morning. The new offer was sent to Seven & i on September 19, the reports said, adding that no substantive negotiations have taken place since then.
Seven & i declined to comment on the reported move when contacted by AFP. While 7-Eleven began in the United States, the franchise has been wholly owned by Seven & i since 2005. 7-Eleven is the world’s biggest convenience store chain and operates more than 85,000 outlets globally. Around a quarter of those are in Japan, where it is a beloved institution, selling everything from concert tickets to pet food and fresh rice balls.
Seven & i will announce its quarterly earnings on Thursday, with the CEO scheduled to address the media. Couche-Tard runs nearly 17,000 convenience store outlets, including Circle K, worldwide. By purchasing 7-Eleven, it is seeking to become “truly global,” said Kai Li, a professor and Canada Research Chair in Corporate Governance at UBC Sauder School of Business.
“Couche-Tard has done well with Circle K acquisitions, expanding its footprint in the United States,” she told AFP. But “such a purchase might raise antitrust concerns” given that the combined entity would have “more market power” and could drive smaller operators out of business, Li said.
© 2024 AFP
