7-Eleven Owner Rejects Couche-Tard’s Takeover Bid
Alimentation Couche-Tard Inc. was “disappointed” in Seven & i Holdings Co.'s board of directors' rejection of its $38.5 billion buyout bid. According to Seven & i, the proposal "grossly" undervalues the company's intrinsic value and its potential.
Seven & i, the parent company of 7-Eleven, also said that Couche-Tard's proposal fails to address the challenges it would face from U.S. regulators. In the Seven & i letter released on Sept. 6, Stephen Dacus, who chairs a special committee of outsiders charged with reviewing the offer, wrote: “Your proposal does not adequately acknowledge the multiple and significant challenges such a transaction would face from U.S. competition law enforcement agencies in the current regulatory environment and provides no certainty to closing. Beyond your simple assertion that you do not believe that a combination would unfairly impact the competitive landscape and that you would ‘consider’ potential divestitures, you have provided no indication at all of your views as to the level of divestitures that would be required or how they would be effected.”
After receiving the rejection letter, Laval, Quebec-based Couche-Tard issued the following statement:
“We continue to have strong conviction that a combination with 7&i has clear strategic and financial benefits for both companies' customers, employees, franchisees and shareholders. We believe that, working together, we can successfully reach and complete a mutually agreeable transaction. We believe a combination would significantly enhance the important roles our companies play in our customers’ daily lives. Together, we would create a leading global retail platform with over 100,000 sites spanning Asia-Pacific, North America, Australia and Europe. Our complementary businesses, shared values and excellent strategic fit would allow us to achieve significantly more together than we could individually. This includes further expanding the iconic 7-Eleven brand internationally, enhancing relationships with franchisees around the globe, and attracting and retaining world-class talent. Together, we can drive growth, learn from each other’s operating expertise, benefit from shared best practices and deliver excellence to customers. This collaboration would also help us achieve both companies’ sustainability goals and drive innovation for the benefit of all stakeholders."
According to the company, Couche-Tard has generated total shareholder return of more than 450% in the past 10 years, more than nine times greater than Seven & i over the same period. As of Sept. 8, Couche-Tard remains willing to enter into an appropriate non-disclosure agreement (NDA) to advance discussions.
In response to the Couche-Tard statement, Seven & i issued its own response on Sept. 9: “We remain open to engaging in sincere discussions should ACT [Alimentation Couche-Tard] put forth a proposal that fully recognizes Seven & i’s stand-alone intrinsic value and addresses the Special Committee’s very real regulatory concerns. Unless and until ACT does so, Seven & i will focus on executing its business and pursuing the actionable avenues we see to realize and unlock shareholder value in the near to medium term.”
Based in Irving, Texas, 7-Eleven Inc operates, franchises and/or licenses more than 13,000 stores in the United States and Canada. In addition to 7-Eleven stores, 7-Eleven Inc. operates and franchises Speedway, Stripes, Laredo Taco Company, and Raise the Roof Chicken and Biscuits locations. The company is No. 24 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America. Alimentation Couche-Tard's U.S. operations are No. 14 on PG’s list.
