Couche-Tard Walking Away From Seven & I Deal May Not Be End Of Story
Japanese 7-Eleven owner Seven & i Holdings Co. could yet remain a buyout target if the convenience store group fails in its business turnaround after dramatically seeing off Alimentation Couche-Tard Inc.'s $45.8 billion takeover approach.
The deal, which would have been the biggest ever foreign takeover of a Japanese company, ended in acrimony as Canada's Couche-Tard issued a 1,500-word missive to Seven & i's founding Ito family claiming they had never been open to talks and that the board had carried out a 'calculated campaign of obfuscation and delay.'
And newly appointed Seven & i CEO Stephen Dacus will now have to convince investors that reforms proposed by his management team can deliver, especially in North America and Japan. The CEO is due to give an update on its turnaround in August.
But it looks like he will have a job on his hands to convince investors. While Seven & i shares have climbed since Couche-Tard's interest became public in August 2024, they are down around 13% since the proposal was withdrawn this week and are off about a fifth in the year to date.
Earlier this week Alimentation Couche-Tard flounced away from its pursuit as the global convenience store and fuel operator cited a 'lack of constructive engagement'.
In a highly unusual step Alex Miller, President and CEO of Alimentation Couche-Tard, and Alain Bouchard, Founder and Executive Chairman, wrote in a letter to the Japanese company's board: "There has been no sincere or constructive engagement from 7&i that would facilitate the advancement of any proposal, contrary to comments made publicly by 7&i representatives. Rather, you have engaged in a calculated campaign of obfuscation and delay, to the great detriment of 7&i and its shareholders.'
Among other things, Couche-Tard claimed that documents it received from Seven & i lacked important information and that executives had failed to show up at meetings.
Seven & i Rebuts Claims
Seven & i said in a rebuttal that it was disappointed by Couche-Tard's decision, claiming the Couche-Tard letter contained 'numerous inaccurate statements' and maintained that its special committee had taken part in 'sincere and constructive discussions.'
In May, things looked very different. Couche-Tard and Seven & i had entered into a nondisclosure agreement to advance discussions and began looking for potential buyers for their overlapping U.S. convenience stores in a move to mitigate antitrust concerns. In its letter, Couche-Tard maintained there was a 'a clear path to U.S. regulatory approval.'
For Seven & I's part, further investor-friendly efforts will be tough to enact, given that it has already taken major steps to overhaul the business and is set to sell off some retail operations in a $5.4 billion deal that will close September.
It is also taking steps to bolster its shares with a five-year, circa $13.5 million buyback. But so far that has failed to move the dial, especially as some of the funding was due to come from an initial public offering of the U.S. business. Couche-Tard's exit has raised questions over that plan.
Seven & i Looks To Reform
However, should leave Seven & i clear to pursue growth and profitability in its convenience stores business, which investors have been pushing for. Indeed, Seven & i has previously reformed after external pressure. In 2016, concerns raised by activist fund Third Point over executive appointments resulted in the exit of former chairman Toshifumi Suzuki.
Seven & i Holdings could yet be a takeover target. (Photo by Kazuhiro NOGI / AFP) (Photo by KAZUHIRO ... More NOGI/AFP via Getty Images)
And ValueAct Capital Management's campaign led to Seven & i selling its Sogo and Seibu Co. department stores to Fortress Investment Group in 2022 for $1.7 billion, although it failed to oust then CEO Ryuichi Isak.
For Seven & i, while operating profit for the March-thru-May rose 9.7% year-on-year to $438 million, it was the second-lowest quarterly result in the past decade and domestic same-store sales remained flat, while revenue remained weak in the U.S.
While Couche-Tard may have stepped away, its decision to make its views public could potentially attract other bidders or activist investors, or prompt the resurrection of a management buyout by Seven & i's founding Ito family. The underperfroming share price also makes Seven & i a prime candidate to be taken private.
Indeed, while Couche-Tard has placed the blame squarely on Seven & i's management, some analysts have argued that the failure of the deal was simply because the offer from was not big enough to counter Seven & i's opposition.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
22 minutes ago
- Yahoo
EQT and CPP Investments to acquire NEOGOV, a provider of HR and compliance software for U.S. public sector agencies, from Warburg Pincus and Carlyle
The EQT X fund ("EQT") and Canada Pension Plan Investment Board ("CPP Investments") have agreed to acquire NEOGOV, which serves over 10,000 public sector agencies with purpose-built government HR and compliance software solutions NEOGOV's cloud-native solutions support the full employee lifecycle and help public sector agencies drive efficiency and stay compliant with local policies and regulatory frameworks EQT and CPP Investments will partner with CEO Shane Evangelist and the management team to accelerate growth and expansion, building upon their track records in the US software sector STOCKHOLM, July 28, 2025 /PRNewswire/ -- EQT announced today that the EQT X fund ("EQT") together with Canada Pension Plan Investment Board ("CPP Investments") have agreed to acquire NEOGOV (the "Company") from funds managed by Warburg Pincus and Carlyle. Founded in 2000 and headquartered in El Segundo, California, NEOGOV delivers purpose-built human capital management and public safety solutions to nearly 10,000 public sector organizations across North America. NEOGOV's cloud-native suite supports the full employee lifecycle – from recruitment and onboarding to performance management and compliance management – while helping agencies stay compliant with local policies and regulatory frameworks. "Local governments are the backbone of our communities. Our mission is to help them operate more efficiently and serve citizens more effectively. EQT and CPP Investments share our vision and bring the experience and capital to help us scale faster," said Shane Evangelist, CEO of NEOGOV. "Our priorities include advancing product innovation and AI capabilities to help public sector agencies drive increased efficiency and compliance adherence. EQT and CPP Investments' deep expertise in software and broad network of advisors will be instrumental to supporting NEOGOV's growth." "We are excited to partner with Shane and the NEOGOV team, who are operators at the highest levels. The team brings a deep understanding of the challenges that public sector agencies face, and we're proud to support a company that has earned such trust in the public sector," said Arvindh Kumar, Partner and Co-Head of EQT's Global Technology Team. Tyler Parker, Managing Director in the EQT Private Equity advisory team, added: "It's rare to find a software company that is so well-loved by its customers, and we look forward to partnering with NEOGOV to continue to modernize public sector operations and deliver impactful technology to those on the front lines of civic service." "NEOGOV is a leading software platform with distinct customer offerings that is poised for growth due to increasing demand from its customers across North America. Together with its strong management team, the Company is a good fit for our strategy to invest in high-quality software companies. We look forward to supporting the Company in this next phase of development alongside EQT and the management team," said Sam Blaichman, Managing Director, Head of Direct Private Equity, CPP Investments. With this transaction, EQT X is expected to be 60 – 65 percent invested (including closed and/or signed investments, announced public offers, if applicable, and less any expected syndication). The transaction is subject to customary conditions and approvals and is slated for completion in the coming months. Moelis & Company LLC served as exclusive financial advisor and Willkie Farr & Gallagher served as legal counsel to NEOGOV. Jefferies LLC served as exclusive financial advisor and Ropes & Gray served as legal counsel to EQT. Contact EQT: EQT Press Office, press@ CPP Investments: Asher Levine, Public Affairs & Communications, alevine@ T: +1 929 208 7939NEOGOV: Scott Jensen, Vice President of Marketing, sjensen@ This information was brought to you by Cision The following files are available for download: PR_EQT CPPI NEOGOV_25.07.28 DSC03016 View original content: Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
22 minutes ago
- Yahoo
Trump is getting the world economy he wants -- but the risk to growth could spoil his victory lap
WASHINGTON (AP) — President Donald Trump is getting his way with the world economy. Trading partners from the European Union to Japan to Vietnam appear to be acceding to the president's demands to accept higher costs — in the form of high tariffs — for the privilege of selling their wares to the United States. For Trump, the agreements driven by a mix of threats and cajoling, are a fulfillment of a decades-long belief in protectionism and a massive gamble that it will pay off politically and economically with American consumers. On Sunday, the United States and the 27-member state European Union announced that they had reached a trade framework agreement: The EU agreed to accept 15% U.S. tariffs on most its goods, easing fears of a catastrophic trans-Atlantic trade war. There were also commitments by the EU to buy $750 billion in U.S. energy products and make $600 billion in new investments through 2028, according to the White House. 'We just signed a very big trade deal, the biggest of them all,' Trump said Monday. But there's no guarantee that Trump's radical overhaul of U.S. trade policy will deliver the happy ending he's promised. The framework agreement was exceedingly spare on details. Most trade deals require months and even years of painstaking negotiation that rise and fall on granular details. High-stakes negotiations break Trump's way Financial markets, at first panicked by the president's protectionist agenda, seem to have acquiesced to a world in which U.S. import taxes — tariffs — are at the highest rates they've been in roughly 90 years. Several billion in new revenues from his levies on foreign goods are pouring into the U.S. Treasury and could somewhat offset the massive tax cuts he signed into law on July 4. Outside economists say that high tariffs are still likely to raise prices for American consumers, dampen the Federal Reserve's ability to lower interest rates and make the U.S. economy less efficient over time. Democrats say the middle class and poor will ultimately pay for the tariffs. 'It's pretty striking that it's seen as a sigh of relief moment,' said Daniel Hornung, a former Biden White House economic official who now holds fellowships at Housing Finance Policy Center and the Massachusetts Institute of Technology. 'But if the new baseline across all trading partners is 15%, that is a meaningful drag on growth that increases recession risks, while simultaneously making it harder for the Fed to cut.' The EU agreement came just four days after Japan also agreed to 15% U.S. tariffs and to invest in the United States. Earlier, the United States reached deals that raised tariffs on imports from Vietnam, Indonesia, the Philippines and the United Kingdom considerably from where they'd been before Trump returned to the White House. More one-sided trade deals are likely as countries try to beat a Friday deadline after which Trump will impose even higher tariffs on countries that refuse to make concessions. Trump's long-held theory now faces reality The U.S. president has long claimed that America erred by not taking advantage of its clout as the world's biggest economy and erecting a wall of tariffs, in effect making other countries ante up for access to America's massive consumer market. To his closest aides, Trump's use of tariffs has validated their trust in his skills as a negotiator and their belief that the economists who warned of downturns and inflation were wrong. Stocks rose slightly on Monday morning on tariffs that once seemed unthinkably risky. 'Where are the 'experts' now?' Commerce Secretary Howard Lutnick posted on X. But the story is not over. For one thing, many of the details of Trump's trade deals remain somewhat hazy and have not been captured in writing. The U.S. and Japan, for instance, have offered differing descriptions of Japan's agreement to invest $550 billion in the United States. 'The trade deals do seem to count as a qualified win for Trump, with other countries giving the U.S. favorable trade terms while accepting U.S. tariffs,' said Eswar Prasad, a Cornell University economist. "However, certain terms of the deals, such as other countries' investments in the U.S., seem more promising in the abstract than they might prove in reality over time.'' Trump is also facing a court challenge from states and businesses arguing that the president overstepped his authority by declaring national emergencies to justify the tariffs on most of the world's economies. In May, a federal court struck down those tariffs. And an appeals court, which agreed to let the government continue collecting the tariffs for now, will hear oral arguments in the case Thursday. And he's yet to reach an accord with China — which has deftly used the threat of retaliatory tariffs and withholding exports of rare earth minerals that are desperately needed for electric vehicles, computer chips and wind turbines to avoid caving in to Trump's demands. The U.S. and China are talking this week in Stockholm, Sweden. Economists remain skeptical of the impacts for US consumers There is also skepticism that tariffs will produce the economic boom claimed by Trump. Analysts at Morgan Stanley said 'the most likely outcome is slow growth and firm inflation,' but not a recession. After all, the 15% tariffs on the EU and Japan are a slight increase from the 10% rate that Trump began charging in April during a negotiation period. While autos made in the EU and Japan will no longer face the 25% tariffs Trump had imposed, they will still face a 15% tax that has yet to appear in prices at U.S. dealerships. The administration has said the lack of auto price increases suggests that foreign producers are absorbing the costs, but it might ultimately just reflect the buildup of auto inventories to front-run the import taxes. 'Dealers built stocks ahead of tariff implementation, damping the immediate impact on retail prices. That cushion is starting to wear thin,' Morgan Stanley said in a separate note. 'Our Japan auto analyst notes that as pre-tariff inventory clears, replacement vehicles will likely carry higher price tags.' Economist Mary Lovely of the Peterson Institute for International Economics warned of a 'slow-burn efficiency loss'' as U.S. companies scramble to adjust to Trump's new world. For decades, American companies have mostly paid the same tariffs – and often none at all – on imported machinery and raw materials from all over the world. Now, as a result of Trump's trade deals, tariffs vary by country. 'U.S. firms have to change their designs and get inputs from different places based on these variable tariff rates,'' she said. 'It's an incredible administrative burden. There's all these things that are acting as longer-term drags on economy, but their effect will show up only slowly.'' Mark Zandi, chief economist at Moody's Analytics, said that the United States' effective tariff rate has risen to 17.5% from around 2.5% at the start of the year. 'I wouldn't take a victory lap,'' Zandi said. 'The economic damage caused by the higher tariffs will mount in the coming months.'' Josh Boak And Paul Wiseman, The Associated Press Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
22 minutes ago
- Yahoo
Why EVgo (EVGO) Stock Is Trading Up Today
What Happened? Shares of electric vehicle charging company EVgo (NASDAQ:EVGO) jumped 3.1% in the morning session after it secured a $225 million credit facility to accelerate the buildout of its nationwide electric vehicle charging infrastructure. The proceeds from the deal were earmarked to accelerate the deployment of more than 1,500 additional high-power fast charging stalls nationwide. This transaction was noted as the largest commercial bank facility for electric vehicle charging in the United States. The five-year credit facility, which was oversubscribed, also included an option to increase the total financing by $75 million to $300 million. The strong interest from the participating global project finance banks signaled significant lender confidence in the company's expansion plans and the future of EV infrastructure. After the initial pop the shares cooled down to $3.59, down 0.4% from previous close. Is now the time to buy EVgo? Access our full analysis report here, it's free. What Is The Market Telling Us EVgo's shares are extremely volatile and have had 56 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. The biggest move we wrote about over the last year was 3 months ago when the stock gained 32.6% on the news that the company reported strong first quarter 2025 results which beat analysts' sales and EBITDA expectations. In addition, full-year EBITDA guidance outpaced Wall Street's estimates. What really stood out was how much more energy people used at its chargers, as network throughput jumped 60%. That helped push revenue up 36%, led by a big rise in charging fees as more cars plugged into EVgo's growing network of stations. Zooming out, we think this quarter featured some important positives. EVgo is down 14.4% since the beginning of the year, and at $3.59 per share, it is trading 59.9% below its 52-week high of $8.94 from October 2024. Investors who bought $1,000 worth of EVgo's shares at the IPO in November 2020 would now be looking at an investment worth $365.39. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story. Sign in to access your portfolio
