Unlock Editor’s Digest for free
FT editor Roula Khalaf selects her favourite stories in this weekly newsletter.
The Japanese operator of 7-Eleven, the world’s largest convenience store chain, has received a takeover offer from Canadian retailer Alimentation Couche-Tard, which controls the Circle K brand.
Couche-Tard’s move at Seven & i Holdings, which follows more than a year of on-again, off-again talks between the two retailers, is the largest foreign takeover attempt targeting a Japanese company.
In a statement, Seven & i said it had set up a special committee of non-executive directors to review Couche-Tard’s offer to acquire all outstanding shares, the first approach to take full advantage of recent changes to M&A guidelines designed to make it harder for Japanese company managements to ignore unsolicited or unwanted offers.
Seven & i shares rose nearly 23 percent on Monday afternoon after news of the takeover bid was first reported on the Nikkei, pushing the company’s market capitalization to $39 billion.
According to several people familiar with the matter, Seven & i has been working with banking advisers such as Morgan Stanley for several months to prepare for what it sees as a growing threat of a foreign takeover.
Couche-Tard has been circling Seven & i for several years and has contacted the Japanese company on and off over the past two years to open friendly negotiations on a deal, the same people say.
Couche-Tard’s move, banking circles say, could also attract other bidders for the company, including private equity groups that have long had their eye on the US 7-Eleven branches.
Seven & i’s preparations for a potential takeover follow a major overhaul of Japan’s merger and acquisition guidelines last year. The new language urges companies to seriously consider any “bona fide” board-level offer, ending decades of powerful CEOs being able to unilaterally reject offers that go against shareholder interests.
The change, M&A bankers and lawyers say, clears the way for foreign buyers to make unsolicited bids for more Japanese companies.
Seven & i recently overhauled its board and stance on corporate governance, it said, under pressure from activist investor ValueAct, which made its stake in the group public in 2021, as well as Japan’s broader push to reform the way companies deal with shareholders. The group’s founder, Masatoshi Ito, one of its largest shareholders, died last year.
Couche-Tard has hired Goldman Sachs as a banking advisor. Morgan Stanley and Goldman declined to comment. Couche-Tard could not immediately be reached for comment.
If a deal with the Canadian group is reached, there could be significant competition hurdles. After acquiring the US gas station group Speedway in 2021, 7-Eleven owns more than 13,000 stores in the US and Canada, while Couche-Tard owns just under 9,000. ValueAct has pushed for a spin-off of the 7-Eleven chain.
In response to pressure for reform, Seven & i also expanded internationally and divested itself of less profitable business areas. Last year, the company sold its Sogo & Seibu department store to the Fortress Group.
Couche-Tard is on the hunt for global acquisitions. The group has completed several acquisitions in the fragmented convenience store sector over the past decade. In 2021, it tried unsuccessfully to buy French supermarket chain Carrefour for €16.2 billion.
Couche-Tard also made a bid for Speedway, which was eventually acquired by Seven & i for $21 billion.
