Seven & i Holdings has made a bold move by rejecting the takeover offer from Alimentation Couche-Tard, stating that the offer does not align with the best interests of its shareholders and stakeholders. The unanimous decision was communicated through a filing with the Tokyo Stock Exchange, where it was revealed that Couche-Tard had proposed to acquire all outstanding shares of Seven & i for $14.86 per share.
Stephen Dacus, the chairman of the special committee appointed by Seven & i to evaluate Couche-Tard’s proposal, criticized the timing and valuation of the offer. He expressed that the proposal was “opportunistically timed” and “grossly undervalues” Seven & i’s potential for growth and shareholder value realization. Despite the restructuring plan announced by Seven & i in April, which aimed to enhance 7-Eleven’s global presence and divest underperforming assets, Couche-Tard’s offer fell short of expectations.
Dacus raised concerns about the potential challenges the takeover would face from U.S. anticompetition agencies. He questioned Couche-Tard’s commitment to addressing regulatory hurdles, noting that the proposal lacked clarity on divestitures or a timeline for regulatory approval. Dacus emphasized that Seven & i would consider proposals that prioritize the interests of stakeholders and shareholders while also being mindful of regulatory concerns.
Ben Herrick, an associate portfolio manager at Artisan Partners, voiced his disappointment with Seven & i’s management team and board for not maximizing the company’s corporate value. Artisan Partners, which holds a stake in Seven & i, had urged the company to explore buyout offers for its Japanese subsidiaries. Herrick highlighted the untapped potential of international licensees outside the U.S., criticizing Seven & i for its slow pace of change and lack of oversight.
In contrast to Herrick’s perspective, Richard Kaye, a portfolio manager at Comgest, defended Seven & i’s performance, stating that the company has excelled in logistics and product innovation. Kaye argued against radical reform by a foreign acquirer, suggesting that Seven & i is already performing exceptionally well and may not benefit significantly from external intervention.
The rejection of Alimentation Couche-Tard’s takeover offer by Seven & i Holdings underscores the company’s commitment to maximizing shareholder value and navigating regulatory challenges. As stakeholders and investors weigh in on the decision, it remains to be seen how Seven & i will continue to position itself for growth and success in the evolving convenience store market landscape.