Itochu pulls out of Seven & i Holdings buyout efforts
Reuters is reporting Itochu has withdrawn its bid to assist the founding family of Seven & i Holding to take the company private after Alimentation Couche-Tard had made several overtures to take on the company.
Seven & i Holdings, which operates the well-known 7-Eleven convenience store retail chain, was approached last year by Couche-Tard, which operates the Circle K chain of convenience stores, with an offer of nearly $40 billion to take over the company. Seven & i Holdings rejected the offer and Couch-Tard later sweetened its offer only to be rebuffed once more, with Seven & i Holdings saying the offers greatly ‘undervalued’ the company.
Seven & i Holdings then began moves to restructure to fend off the buyout offer, by separating 31 subsidiary businesses, including the Ito-Yokado specialty stores and the Denny’s restaurant brand and place them in a new holding company named York Holdings.
The company’s Japanese convenience business, along with the U.S. operations and operations around the globe, will be under 7-Eleven Corp.
At the same time, the company began working to secure the needed financing from some of Japan’s major banks as well such firms as Itochu, operator of the FamilyMart chain of stores, Japan’s second biggest chain of convenience stores. According to Reuters, Itochu backed out of its offer as it saw few synergies between its business and that of Seven & i Holdings.
Neither company has commented on the news.
Previously, the executive team of Couche-Tard visited Japan to makes it case to Seven & i Holdings and to better understand the role that the 7-Eleven stores in both in the company’s operations in Japan’s society. In August of last year, Japan's economy minister Ryosei Akazawa raise security concerns around Couche-Tard attempts to buy the company and Seven & i Holdings was classified as "core" to Japan's national security, pointing to the role 7-Eleven locations have in making available government services and in assisting in helping the government and local municipalities in national emergencies, such as providing food other critical supplies during national disasters.
As the time of the visit by Couch-Tarde’s executive team the company released a statement that it was committed to finding “amutually agreeable transaction that benefits both companies’ customers, employees, franchisees and shareholders, creating a global retail champion. We look forward to working constructively with Seven & i to reach a friendly agreement.”
