Seven & i Holdings Co., Ltd, the Japanese owner of convenience store chain 7-Eleven, has rejected a $38 billion takeover bid from Canadian rival Alimentation Couche-Tard.
In a letter addressed to the prospective buyer, Seven & i Holdings said the offer “grossly” undervalued the company and will raise regulatory concerns.
The 7-Eleven owner added, however, that it remains open to negotiations and is ready to consider a better proposal.
“I want to emphasize that the 7&i Board is single-mindedly focused on delivering value for 7&i shareholders and other stakeholders. We are open to sincerely consider any proposal that is in the best interests of 7&i shareholders and other stakeholders; however, we will resist any proposal that deprives our shareholders of the company’s intrinsic value or that fails to specifically address very real regulatory concerns,” Stephen Dacus, the chair of the Seven & i board wrote in a letter addressed to Alain Bouchard, Chairperson of Alimentation Couche-Tard.
“We are open to engaging in sincere discussions should you put forth a proposal that fully recognizes our standalone intrinsic value and addresses our concerns regarding certainty of closing in the current regulatory environment. However, we do not believe, for several critical reasons, that the proposal you have put forward provides a basis for us to engage in substantive discussions regarding a potential transaction,” he added.
Alimentation Couche-Tard, which is based in Quebec, runs around 17,000 shops across North America, Europe and Asia under the Circle K and Couche-Tard brands.
The initial offer by the prospective buyer valued Seven & i at $14.86 per share, which represents a premium of more than 20% above its share price before the offer was announced.
7-Eleven is the world’s biggest convenience store chain, with 85,000 outlets across 20 countries and territories.