IRVING, Texas — This article was originally published by our content partners at the Dallas Business Journal. You can read the original article here.
The parent company of Irving-based 7-Eleven is the subject of a multibillion-dollar bidding battle that has been intensifying in recent weeks. At stake is the future of the largest U.S. convenience store chain.
The founding family of Japan-based Seven & i Holdings Co. Lt and Canadian-headquartered Alimentation Couche-Tard, the owner of the Circle K convenience store chain, have each pitched 11-figure offers for the company.
Couche-Tard has offered to buy Seven & i for $47 billion. The company raised its bid in October after Seven & i rejected its initial offer of $39 billion, saying it "grossly" undervalued the business. The deal would be the largest foreign takeover of a Japanese company if it goes through, according to Business Insider.
On the other side, Junro Ito, the son of Seven & i founder Masatoshi Ito, last month proposed a $58 billion deal to take the company private. The family aims to complete the deal by the end of February but getting that much money on short notice could be a challenge. Reuters reported recently funding could come from Japan's three largest lenders: Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group.
Couche-Tard executives are still interested in pursuing an amicable deal, Reuters reported Nov. 26. A special committee of Seven & i board members is considering each proposal, Bloomberg reported.
Couche-Tard, founded in 1980, has 16,800 stores spanning 31 countries, including more than 7,100 locations in the United States. It has been interested in Seven & i for decades. Founder and Executive Chairman Alain Bouchard informally approached the Japanese company's executives in the early 2000s to see if there was any interest in completing a deal but was rejected, according to Bouchard's authorized biography.
Seven & i, meanwhile, has 85,000 stores across 19 countries. That includes nearly 13,000 locations of 7-Eleven in the United States.
Challenges caused by inflation could be the opening Couche-Tard needs to finally complete its deal, the Journal reported. Shares of Seven & i fell 13% in the 12 months before Couche-Tard's opening bid in August. Last month, Seven & i decreased its profit forecast for its current fiscal year to $1.09 billion, down more than 40%, and cited "sluggish demand caused by inflation." However, its stock price has surged in recent days amid news of the Ito family bid.
An acquisition could help the combined company cut costs by increasing leverage over supplies and consolidating deliveries to stores.
Couche-Tard also aims to move away from fuel and cigarettes toward selling more fresh foods, which represents a third of 7-Eleven's Japanese sales.
"We continue to see a strong opportunity to grow together and enhance our offerings and service to millions of customers across the globe," a Couche-Tard spokesman said in a statement to the Wall Street Journal. "We also remain confident in our ability to finance and complete this combination."
