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.” The initial offer was valued at $38.6 billion as of September 2024, and it has since climbed to nearly $46 billion.
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.
