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Alimentation Couche-Tard’s planned $47bn buyout of Seven & i is a better deal and less risky than its target’s break-up plan, the Canadian retailer said as it urged the Japanese group to start talks.
Couche-Tard executives said in Tokyo that they wanted more information on Seven & i’s business and the chance to discuss their bid with government officials in Japan.
Their visit comes after the Canadian company increased its offer for the 7-Eleven owner by 20 per cent and follows an announcement from the Japanese group that it planned to split its convenience store operations from non-core businesses, a move investors and analysts said was an attempt to fend off the bid.
“We think [our offer is] more compelling than what was proposed last week, with a great deal more certainty and much less risk,” said Alex Miller, the recently appointed chief executive and president of Couche-Tard.
“Our offer is a certainty, right, it’s cash, versus a hope that [Seven & i] can continue to execute on a plan that’s not delivered value over the last years,” added Brian Hannasch, the company’s former chief executive and now special adviser to the group.
The comments were made during a joint interview in Tokyo that included Couche-Tard’s chief financial officer and its billionaire founder, Alain Bouchard, who has been targeting Seven & i for roughly 20 years.
The Canadian company launched a first $39bn bid for the Japanese group in August. Seven & i rejected the offer, saying it “grossly” undervalued the business and did not account for the difficulty of getting a deal past US competition regulators.
Bouchard said Seven & i and government officials had so far refused a meeting. “We’re here, obviously, because of our compelling offer we have made to Seven & i. And we hope to be able to have access to the internal information that we need to look at,” said Bouchard.
One person close to Seven & i said that while a meeting had yet to be agreed, the two groups had been discussing the terms under which one might take place.
Couche-Tard recently sent Seven & i a new potential acquisition price of close to $47bn, according to multiple people familiar with the matter. It is being considered by a special Seven & i committee put together to examine the bids.
“We are interested in the entirety of Seven & i, absolutely, including Japan,” said Miller, adding that they would keep local operations intact.
Seven & i’s stock price has risen by more than 30 per cent since the first Couche-Tard offer in August. But at ¥2,218 ($15) a share, it is still below the Canadian company’s latest bid of closer to $18.
“We made a great offer, 55 per cent over the undisturbed” share price, said Hannasch. “They had a very weak earnings release. Where would their stock be today, candidly, without our offer underpinning it?”
