Circle K Owner Willing to Engage With Seven & i After Bid Rejection
By P.R. Venkat
The Canadian owner of Circle K stores has said that it is willing to discuss and engage with Seven & i, which last week rejected its near $39.0 billion takeover offer on valuation and regulatory concerns.
Alimentation Couche-Tard is highly confident that discussions would lead to increased value and said it has sufficient capacity to finance the transaction in cash.
"We have secured a letter from our financial advisor stating that it is highly confident that it is able to arrange the financing for the proposed transaction, subject to customary conditions," Couche-Tard said in a statement late Sunday.
The Tokyo-based Seven & i, which operates 7-Eleven convenience stores worldwide, last week rejected the offer by Couche-Tard saying it significantly underestimated the company's value and potential.
It also said the proposal needed to sufficiently address regulatory issues, including a possible antitrust challenge in the U.S., where both companies have large store networks.
"As 7&i and Couche-Tard have both done previously as part of successful acquisitions, we would, alongside 7&i, jointly consider divestitures that may be required to secure regulatory approvals." the Canadian firm said adding that it has a successful history of working with the U.S. and other regulators.
Couche-Tard had offered to acquire all shares outstanding of Seven & i at $14.86 a share in cash. That would put the value of the deal at about $38.7 billion.
Couche-Tard, or "night owl" in French, has been snapping up competitors around the world and now runs thousands of stores in North America, Europe and Asia. Its best-known brand in the U.S. is Circle K.
In recent years, Seven & i has faced pressure from some foreign shareholders to raise profitability and focus on its core convenience-store business.
The Japanese company responded by selling some of its businesses including department store operator Sogo & Seibu last year. It is also considering listing its supermarket business.
"We stand by prepared to enter into collaborative and friendly discussions with 7&i to focus on finding greater value for 7&i and its shareholders," Couche-Tard said.
Seven & i shares were higher early Monday in Tokyo trade. The stock was last up 2.1%, outperforming the benchmark Nikkei 225 which is nearly 3.0% lower.
Write to P.R. Venkat at venkat.pr@wsj.com
(END) Dow Jones Newswires
September 08, 2024 21:30 ET (01:30 GMT)
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