7-Eleven owner restructures to fight takeover

7-Eleven owner restructures to fight takeover

7-Eleven is the world's biggest convenience store chain
7-Eleven is the world's biggest convenience store chain. Photo: ANGELA WEISS / AFP
Source: AFP

The owner of 7-Eleven announced a major restructuring on Thursday as it seeks to boost its share price and fend off what would be the biggest foreign takeover of a Japanese firm.

Seven & i Holdings rejected a $40-billion takeover offer last month from Alimentation Couche-Tard (ACT) but the Canadian group has since then reportedly sweetened its offer.

7-Eleven "konbini" are a ubiquitous lifeline for Japan's ageing population and a cherished one-stop shop for everything from rice balls to concert tickets to photocopies.

Second-quarter earnings published on Thursday, however, showed flagging sales with the company cutting its full-year operating profit outlook.

Seven & i announced plans to spin off non-core businesses into a new holding company comprising its supermarket food business, speciality stores and other businesses.

It said it would consider an initial public offering (IPO) of the new unit and bringing in strategic partners "to unlock value for the Company's shareholders and other stakeholders".

Read also

China's central bank says opens up $70.6 bn in liquidity to boost market

Creating the new unit allows Seven & i to focus solely on 7-Eleven -- the world's biggest convenience store chain with more than 85,000 outlets worldwide, a quarter of them in Japan.

An improved share price would also make a takeover attempt by ACT more expensive for the Canadian firm, while also easing pressure from shareholders pressing management to restructure.

7-Eleven began in the United States, but the franchise has been wholly owned by Seven & i since 2005.

Seven & i had said ACT's first proposal of $40 billion "grossly undervalues" its business and could face regulatory hurdles.

The Japanese company said on Wednesday it had received a revised offer but declined to give details.

Bloomberg News and other media outlets reported that ACT had improved its offer by around 20 percent to around seven trillion yen ($47 billion). ACT declined to comment.

Read also

7-Eleven owner confirms new takeover offer from Couche-Tard

Seven & i shares have climbed more than 30 percent since the takeover saga began but are still trading below the reported level of ACT's new offer.

Its shares closed up 4.7 percent on Wednesday, having initially surged nearly 12 percent on news of the new ACT offer. They edged down less than one percent on Thursday.

The new holding company will include 31 businesses, such as supermarket chains Ito-Yokado, York-Benimaru and baby goods shop Akachan Honpo.

Seven & i also said it plans to change its name, tentatively to 7-Eleven Corporation, which will be finalised at a shareholders' meeting.

Couche-Tard, which began with one store in the city of Laval in 1980, now runs nearly 17,000 convenience store outlets worldwide.

In 2021, Couche-Tard dropped a takeover bid worth 16 billion euros ($17 billion today) for French supermarket Carrefour after the French government said it would veto the deal over food security concerns.

Read also

7-Eleven owner's shares spike on report of new buyout offer

It is unclear if Japan's new government under Prime Minister Shigeru Ishiba would do the same, but the finance ministry designated Seven & i a "core" industry last month.

New feature: Сheck out news that is picked for YOU ➡️ click on “Recommended for you” and enjoy!

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.