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Yahoo
13 hours ago
- Business
- Yahoo
Fueling Up: Was Seven & i ever interested in Couche-Tard's buyout offer?
This story was originally published on C-Store Dive. To receive daily news and insights, subscribe to our free daily C-Store Dive newsletter. Fueling Up is a column from C-Store Dive offering a fresh perspective on the top news and trends in the convenience store industry. The hype surrounding what would've been one of the most monumental c-store mergers in history died last week when Alimentation Couche-Tard withdrew its nearly $50 billion buyout offer of Seven & i Holdings. Nearly a year after it made its bid, Circle K's parent company said a lack of engagement from Seven & i was a major roadblock to the deal, which would've included over 80,000 7-Eleven c-stores globally. To say the Canadian retailer is bitter about this ending would be an understatement. In a letter to Seven & i late Wednesday evening, Couche-Tard's President and CEO Alex Miller and Chairman of the Board Alain Bouchard said Seven & i's due diligence over the past year was negligible. The executives added that Seven & i displayed a 'persistent lack of good faith and judgement' during the process and 'engaged in a calculated campaign of obfuscation and delay.' But this apparent negligence is nothing but a 'mischaracterization,' according to Seven & i, which released its own letter Thursday morning in response to Miller's and Bouchard's onslaught. The Japanese company said it's disappointed but not surprised by Couche-Tard's withdrawal, adding that Couche-Tard faced significant challenges in economic and financial markets over the past year. Despite Couche-Tard's accusations of a premeditated rejection, Seven & i emphasized that it 'consistently engaged in good faith and constructively' in exploring a deal with Couche-Tard. This is obviously contradictory. Couche-Tard said Seven & i wasn't willing to play ball, while Seven & i claims it was suited up and ready to swing at the right pitch. Who and what are we supposed to believe? All we can do is break down the facts. Pressure buildups and cultural dissonance Seven & i had been under shareholder pressure long before Couche-Tard entered the picture. Investors have been urging the company to spin off its c-store business into a separate entity for years. That pressure intensified as Seven & i's earnings dropped in the years following, reaching a climax when more investors called for the removal of several directors as well as former CEO Ryuichi Isaka. When Couche-Tard came along, some shareholders were adamant that Seven & i pursue the deal to boost its corporate value. So even if Seven & i was never interested in selling to Couche-Tard and yielding its claim as the world's largest c-store retailer, passively engaging with the Canadian company may have been in its best interest. 'The blunt truth is that Seven & i was never really in the market for a deal. It saw the overtures as hostile and contrary to its interests,' Neil Saunders, managing director of retail research agency GlobalData Retail, said in a LinkedIn post on Thursday. 'However, there were a string of other reservations that the group raised, all designed to delay and reduce the possibility of an agreement. This attrition eventually wore Couche-Tard down.' Even if Seven & i was legitimately interested in being acquired, a difference in cultures may have also halted progress. This was top of mind from the start, with Couche-Tard saying back in September that although it had no presence in Japan, it would do its best to empower Seven & i's leaders and operators in the nation to carry on as usual. But the 'very different working styles' between Japan and Canada may have ultimately been too much for Seven & i, Jarred Neubronner, senior analyst with the Institute for Grocery Distribution, said in a LinkedIn post on Thursday. 'After having built up 7-Eleven in the past decades to become the world's largest convenient brand, Seven & i's management would not have wanted a takeover that would lead to a drastic change in ways of working,' Neubronner said. 'The blunt truth is that Seven & i was never really in the market for a deal. It saw the overtures as hostile and contrary to its interests." Neil Saunders Managing director of GlobalData Retail Despite the sour ending to what was the most anticipated storyline I've covered as a c-store journalist, not all may be lost. When I posted the news to LinkedIn on Thursday, Michael Infranco, assistant vice president of retail analytics firm RetailStat, commented that given Seven & i's IPO plans for 7-Eleven, a deal for the thousands of North America stores could still be on the table. Whether that happens remains to be seen. I won't count on it. But c-store operators have proven that even in an industry this reliable and consistent, they'll throw a nasty changeup every once in a while. Recommended Reading Couche-Tard ends takeover bid for Seven & i
Yahoo
4 days ago
- Business
- Yahoo
Couche-Tard ends takeover bid for Seven & i
This story was originally published on C-Store Dive. To receive daily news and insights, subscribe to our free daily C-Store Dive newsletter. Dive Brief: Alimentation Couche-Tard has withdrawn its bid to acquire Seven & i, the parent company of 7-Eleven, the convenience retailer announced on Wednesday. Couche-Tard, parent company of Circle K, said it reached this decision due to a 'lack of constructive engagement by Seven & i.' In a separate letter, Seven & i called that a mischaracterization and acknowledged the 'significant changes in the global economy, exchange rates, and financing markets' that likely impacted Couche-Tard's decision. While this ends one of the biggest c-store stories of the past year, both companies have major initiatives at hand, with Couche-Tard integrating GetGo Cafe + Market into its operations while Seven & i prepares to take its North American operations public. Dive Insight: In its final salvo of this acquisition saga, Couche-Tard again took aim at what it called Seven & i's 'persistent lack of good faith engagement.' It outlined a series of what it felt were limited and unproductive meetings and a lack of movement once the two companies signed an NDA and began to seriously pursue a store divestment package that would appease FTC requirements for the deal. 'Since entering into the NDA, 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, including in the July 11, 2025 earnings call in which 7&i noted it is 'seriously' considering our proposal,' Couche-Tard's President and CEO Alex Miller and Chairman of the Board Alain Bouchard said in the letter. Couche-Tard's letter also outlined two alternative transaction structures that the companies put forth. Couche-Tard proposed buying all of Seven & i's non-Japanese operations as well as a 40% stake in 7-Eleven Japan. Seven & i, on the other hand, offered to trade 7-Eleven Inc., its North American branch, for equity ownership in Couche-Tard. 'This structure would not deliver the significant premium that was offered to your shareholders in our transaction proposals and, in our view, would undermine the operational prospects of the combined business,' said Miller and Bouchard in the letter. In its letter, Seven & i highlighted its standalone value creation plan, including the sale of its superstore business and the North American IPO. The proceeds from both would be used to pay for about 2 billion yen ($13.5 million) worth of share buybacks. 'We are also highly focused on moving quickly to improve key areas of our operations to enhance performance metrics over both the medium and longer term,' Seven & i noted in its announcement. Couche-Tard first made a bid for Seven & i last August, which was quickly rejected. The Canadian retailer made a second offer, and the companies slowly proceeded from there, with both sides occasionally accusing the other of slowing down the process. Antitrust concerns in the U.S. were among the biggest issues for Seven & i, but with Couche-Tard's decision to back out, the deal failed before facing those questions. With its bid for Seven & i withdrawn, Couche-Tard can now turn its attention to integrating GetGo's 270 c-stores, which it bought from grocer Giant Eagle for $1.6 billion last month. Recommended Reading Fueling Up: 7-Eleven and Couche-Tard have tons of stores to sell. Who's buying? 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
5 days ago
- Business
Canada's Couche-Tard drops offer to buy Japanese 7-Eleven convenience stores
TOKYO -- Canadian retail chain Alimentation Couche-Tard is dropping its proposal to acquire Seven & i Holdings Co., the Japanese operator of the 7-Eleven convenience store chain, citing frustration in ongoing negotiations that showed 'a lack of constructive engagement.' The 7-Eleven parent company rejected an offer last year, but Couche-Tard, which runs the global Circle K chain, was still interested and tried to coax a deal with the Japanese chain known here as 'conbini.' In a letter dated July 16 and sent to the Seven & i board, Couche-Tard stressed it had made a good offer earlier this year in a proposal of 2,600 yen ($17.50) per ordinary share in cash, which it said represented a 47.6% premium to the stock price. The initial offer, made last year, was for 2,200 yen ($14.86) per share in cash. In the letter, sent to media Thursday and signed by its two top executives, including founder Alain Bouchard, Couche-Tard expressed exasperation at the response it was getting from Seven & i despite repeated attempts at dialogue. 'We have been very patient and respectful throughout this process, beginning with our meeting on July 23, 2024,' the letter said. 'You have engaged in a calculated campaign of obfuscation and delay, to the great detriment of 7 & i and its shareholders. We believe this approach reinforces our concerns about your approach to governance. Based on this persistent lack of good faith engagement, we are withdrawing our proposal.' Couche-Tard, which runs nearly 17,000 stores in more than 30 countries and territories, including the U.S., said the documents it got lacked key information, executives were no-shows at meetings, and the meetings it did have ended up being 'readouts' of statements, not frank discussions. Seven & i acknowledged the dropped offer Thursday and said it considered talks 'in good faith and constructively.' 'We remain fully committed to our standalone value creation plan, which we have been pursing in parallel, and to unlocking the value of our businesses, including our North American convenience store business. Our plan is concrete and actionable,' it said in a statement. Some analysts say Seven & i management has not fully leveraged the business' global potential or delivered enough value to shareholders, and could use better marketing, although its bottom line is unlikely to be affected by U.S. President Donald Trump's tariff policies. The 7-Eleven franchise, which spans more than 85,000 stores in Japan, the U.S. and Europe, has a new chief executive, Stephen Hayes Dacus, the first foreigner tapped to head 7-Eleven. Dacus, an American whose mother is Japanese, has promised a leaner business by focusing on the supply chain and tailoring shop offerings to various regions. For the first quarter of this fiscal year, Seven & i reported a doubling in profits to 49 billion yen ($330 million), mainly due to previously announced sales of property and equipment at its Ito-Yokado Co. retail chain. Quarterly sales held up, as a favorable exchange rate helped some overseas earnings, according to the Tokyo-based chain. The seemingly omnipresent 7-Eleven chain speckles the streets of Japan, offering everything from stationery items and rice balls to hot coffee and utility bill payments.
Reuters
5 days ago
- Business
- Reuters
Breakingviews - Couche-Tard should have gone hostile on Seven & i
HONG KONG, July 17 (Reuters Breakingviews) - Be bold and go hostile, or don't bother at all. That's the message Canada's Alimentation Couche-Tard ( opens new tab is sending to foreigners eyeing acquisitions of Japanese companies. The company's withdrawal on Wednesday of its $46 billion non-binding proposal to purchase convenience store operator Seven & i (3382.T), opens new tab, along with a roughly 1,500-word rebuke, opens new tab of the process, suggests it's time for buyers to stop being friendly – and for Tokyo to firm up how it wants Japan Inc to behave. Couche-Tard's bid for the 7-Eleven owner was compelling at a 47% premium to the undisturbed share price nearly a year ago, but the soft approach allowed its reluctant target to drag its feet. In Tokyo, it was no secret that the company did not want to be bought; its founding family even tried its own white knight buyout before abandoning it. So it is unsurprising that Alain Bouchard, Couche-Tard's founder and executive chair concluded "there has been no sincere or constructive engagement" after the suitor raised its offer and signed a non-disclosure agreement. Seven & i calls these barbs "mischaracterizations", but the saga evokes Japan's past bad M&A, like Toshiba's long-drawn-out sale, which activists effectively kicked off in 2017. It also confirms that subsequently introduced guidelines for fair M&A and corporate takeovers aren't worth much. These were designed to revive the $4 trillion economy after decades of deflation. Companies are not on board, however. They make a show of acting in good faith but clutch to poison pill defences, opens new tab. Even Japan's largest publicly traded firm, Toyota Motor (7203.T), opens new tab, in June emerged as a leader of a highly controversial $33 billion deal that, as the Asian Corporate Governance Association puts it, opens new tab, "exposes the persistent frailties of Japan's corporate governance regime and the enduring power of entrenched interests". Couche-Tard's decision not to go hostile no doubt stemmed from worrying doing otherwise would scare off the Japanese management team. It also faced antitrust hurdles in the United States and clamouring about the national interest in Japan. Yet there is a growing contingent of bankers and lawyers in the Asian country who view cultural issues as outdated hurdles to transformative inbound deals; they are advising their clients to take a firmer and, if necessary, hostile approach from the beginning. True, Couche-Tard succeeded in forcing Seven & i to replace its CEO with a foreigner, Stephen Dacus, and revise its standalone value creation plan. But without a suitor applying pressure, some commitments could fade over time. One of these is a 2 trillion yen ($13.5 billion) buyback over the next five years funded in part by the agreed 815 billion yen sale of the group's supermarket business to Bain Capital; another is a future stock market listing of its North American convenience store unit that targets an equity value of at least 1 trillion yen. Shareholders have concluded that Seven & i was better off with a buyer too. The stock only fell 6% on Thursday, putting it 18% above its pre-deal level. But it is languishing one-fifth below Couche-Tard's offer. The Canadians did not get what they wanted, and arguably nor did Tokyo. Neither tried hard enough. Follow Una Galani on Linkedin, opens new tab and X, opens new tab.
Yahoo
5 days ago
- Business
- Yahoo
Canada's Couche-Tard drops offer to buy Japanese 7-Eleven convenience stores
TOKYO (AP) — Canadian retail chain Alimentation Couche-Tard is dropping its proposal to acquire Seven & i Holdings Co., the Japanese operator of the 7-Eleven convenience store chain, citing frustration in ongoing negotiations that showed 'a lack of constructive engagement.' The 7-Eleven parent company rejected an offer last year, but Couche-Tard, which runs the global Circle K chain, was still interested and tried to coax a deal with the Japanese chain known here as 'conbini.' In a letter dated July 16 and sent to the Seven & i board, Couche-Tard stressed it had made a good offer earlier this year in a proposal of 2,600 yen ($17.50) per ordinary share in cash, which it said represented a 47.6% premium to the stock price. The initial offer, made last year, was for 2,200 yen ($14.86) per share in cash. In the letter, sent to media Thursday and signed by its two top executives, including founder Alain Bouchard, Couche-Tard expressed exasperation at the response it was getting from Seven & i, despite repeated attempts at dialogue. 'We have been very patient and respectful throughout this process, beginning with our meeting on July 23, 2024,' the letter said. 'You have engaged in a calculated campaign of obfuscation and delay, to the great detriment of 7 & i and its shareholders. We believe this approach reinforces our concerns about your approach to governance. Based on this persistent lack of good faith engagement, we are withdrawing our proposal.' Couche-Tard, which runs nearly 17,000 stores in more than 30 countries and territories, including the U.S., said the documents it got lacked key information, executives were no-shows at meetings, and the meetings it did have ended up being 'readouts' of statements, not frank discussions. Seven & i acknowledged the dropped offer Thursday and said it considered talks 'in good faith and constructively.' 'We remain fully committed to our standalone value creation plan, which we have been pursing in parallel, and to unlocking the value of our businesses, including our North American convenience store business. Our plan is concrete and actionable,' it said in a statement. Some analysts say Seven & i's management has not fully leveraged the business' global potential or delivered enough value to shareholders, and could use better marketing, although its bottom line is unlikely to be affected by U.S. President Donald Trump's tariff policies. The 7-Eleven franchise, which spans more than 85,000 stores in Japan, the U.S. and Europe, has a new chief executive, Stephen Hayes Dacus, the first foreigner tapped to head 7-Eleven. Dacus, an American with a Japanese mother who has experience at Walmart and Uniqlo, has promised a leaner business by focusing on the supply chain and tailoring shop offerings to various regions. For the first quarter of this fiscal year, Seven & i reported a doubling in profits to 49 billion yen ($330 million), mainly due to previously announced sales of property and equipment at its Ito-Yokado Co. retail chain. Quarterly sales held up, as a favorable exchange rate helped some overseas earnings, according to the Tokyo-based chain. The seemingly omnipresent 7-Eleven chain speckles the streets of Japan, offering everything from stationery items and rice balls to hot coffee and utility bill payments. ___ Yuri Kageyama is on Threads:
