‘Persistent lack of good faith engagement': Couche-Tard abandons $11B takeover of 7-Eleven owner

Montreal Gazette

16-07-2025

Quebec-based Alimentation Couche-Tard has withdrawn its proposed acquisition of Seven & i Holdings Co., the Japanese parent company of 7-Eleven, after months of what it described as limited cooperation.
In a scathing letter on Wednesday and addressed to Seven & i's board of directors, the Laval-based retailer said it was stepping back from its ¥2,600-per-share all-cash offer, worth approximately $11 billion, due to 'a persistent lack of good faith engagement.'
'We continue to believe that a combination of Seven & i Holdings and Alimentation Couche-Tard would create a global leader in convenience,' the letter said. 'However, we are not able to effectively pursue this combination without deeper and genuine further engagement.'
Couche-Tard said its proposal, submitted earlier this year, represented a 47.6 per cent premium to Seven & i's unaffected share price. It said the offer was fully financed and included a plan to obtain regulatory approvals, particularly in the United States.
The company stated it had entered into a non-disclosure agreement with Seven & i following an April 18 meeting in Tokyo but had since received 'no sincere or constructive engagement… contrary to comments made publicly by 7&i representatives, including in the July 11, 2025 earnings call in which 7&i noted it is 'seriously' considering our proposal.'
It also alleged that Seven & i had 'engaged in a calculated campaign of obfuscation and delay.'
Couche-Tard said it received just 14 files relating to Seven & i's U.S. operations over a 10-week period and that 'none of our critical questions were answered.' It also said two management meetings—one in Dallas and one in Tokyo—yielded limited insights, with executives declining to answer key questions.
'At the Dallas meeting… the content of the meeting was, as your advisor characterized it, a 'readout,'' the letter stated. 'When one 7-Eleven executive attempted to thoughtfully address a question… he was interrupted and rebuked by Mr. Dacus who pointed to his head as if to remind his colleague to 'think.' Mr. Dacus also declared in the meeting that the discussion was a management presentation and 'not due diligence.''
On regulatory issues, Couche-Tard said it had proposed a term sheet with specific store divestiture plans and a reverse termination fee worth over $1.4 billion, but that Seven & i 'was not willing to share the required information with potential buyers.'
In a bid to find common ground, Couche-Tard said it proposed acquiring 100 per cent of Seven & i's non-Japanese operations and 40 per cent of its domestic business, leaving 60 per cent with existing shareholders.
However, it said Seven & i instead proposed contributing its U.S. business into Couche-Tard in exchange for equity, which Couche-Tard argued would not deliver the 'significant premium' its proposal offered and would 'undermine the operational prospects of the combined business.'
The company concluded: 'We remain as excited as ever about the path forward for (Alimentation Couche-Tard)… However, we are not able to effectively pursue this combination without deeper and genuine further engagement from 7&i leadership and the special committee. Accordingly, we are withdrawing our proposal at this time.'
Couche-Tard operates nearly 17,000 stores across 29 countries and territories, under the Circle K and Couche-Tard banners, and employs approximately 146,000 people. It is one of the largest independent convenience store operators in the U.S. Its founder, Alain Bouchard, is the richest man in Quebec, according to The Gazette Rich List.