The Japanese owner of the convenience store chain 7-Eleven has turned down a $38 billion takeover bid from a Canadian competitor.
In a letter to the Circle K owner, Alimentation Couche-Tard (ACT), Seven & i Holdings stated that the offer significantly undervalued the company and posed substantial regulatory risks.
Despite this, the 7-Eleven owner expressed a willingness to remain in discussions and consider a more favourable offer.
“The Special Committee believes that your proposal is opportunistically timed and grossly undervalues our standalone path and the additional actionable avenues we see to realize and unlock shareholder value,” stated the letter from Seven & i, citing a special committee formed to evaluate the offer.
ACT’s bid coincides with a considerable weakening of the Japanese yen against the US dollar, potentially lowering the cost of acquisition for foreign companies.
“Your proposal does not adequately acknowledge the multiple and significant challenges such a transaction would face from US competition law enforcement agencies,” added Seven & i’s letter.
7-Eleven, renowned as the largest convenience store chain globally, operates around 85,000 outlets in 20 countries and territories.
If the acquisition were to proceed, it would significantly boost ACT’s footprint in North America, potentially doubling its presence to over 20,000 locations across the US and Canada.
The outcome of this proposal remains uncertain as both companies continue to assess the potential and pitfalls of such a significant industry move.
