An executive and large shareholder of 7-Eleven’s parent company is leading an offer to take private the owner of the world’s largest convenience store chain.
The move comes as the Japan-based parent of 7-Eleven, Seven & I Holdings, mulls an unsolicited takeover bid from Laval, Quebec-based Alimentation Couche-Tard, the owner of rival convenience store chain Circle K. Couche-Tard’s convenience store business is considerably smaller than 7-Eleven with about 5,850 Circle K stores in the U.S., compared to 7-Eleven’s 12,600 U.S. locations.
Ito-Kogyo, a company linked to an executive with Seven & I Holdings offered $58 billion to take it private, according to Reuters. Meanwhile, Seven & I has held “preliminary and limited” discussions with Circle K's parent on its bid, the Financial Times reported, citing unnamed sources.
Convenience stores in the U.S. and Canada are rapidly expanding through acquisitions and by opening new locations. The retailers are also enhancing offerings of ready-made food and beverages to boost sales and offset a potential loss of revenue from fuel as motorists shift to electric vehicles from gasoline-powered vehicles.
Couche-Tard this summer offered to acquire Seven & I for $39 billion and, after that bid was rejected, in October increased its bid to $47 billion, according to media reports.
Seven & I formed a special committee of its board of directors to consider the offers from Ito-Kogyo and Couche-Tard, the company said in a statement issued Wednesday.
Reviewing alternatives
“We are committed to an objective review of all alternatives before us … as well as the Company’s stand-alone opportunities to unlock shareholder value,” Seven & I said in its statement.
Couche-Tard has not issued a statement on the recent developments, and the company did not respond to requests to comment.
Ito-Kogyo is affiliated with Junro Ito, a vice president at Seven & I, and owns about 8.2% of Seven & I.
7-Eleven recently announced it will close underperforming stores and roll out a new store design that emphasizes food sales.
Couche-Tard’s bid, if accepted, would be the largest-ever foreign takeover of a Japanese company, according to Reuters.
However, the Japanese banks Sumitomo Mitsui, Mitsubishi UFJ and Mizuho may provide financing for the potential management buyout of 7-Eleven, Bloomberg reported.