7-Eleven’s Japanese owner Seven & i has formally rejected a takeover bid tabled by Canadian convenience store giant Alimentation Couche-Tard Inc (TSX:ATD.B) (ACT).
ACT, which owns the Circle K chain, announced the surprise $38 billion bid in August, in what would have been the largest takeover of a Japanese corporate in history.
In a letter sent to ACT chairman Alain Bouchard, Seven & i chairman Stephen Dacus said the offer “grossly undervalues” the company’s intrinsic value and fails to take into account the competition concerns of the US regulators.
Dacus said: “I want to emphasize that the 7&i Board is single-mindedly focused on delivering value for 7&i shareholders and other stakeholders.
He remains open to “any proposal that is in the best interests of 7&i shareholders and other stakeholders”, leaving the door open for a revised offer from ACT.
Dacus said: “After a thorough review and discussion of your proposal, the 7&i board has unanimously concluded, based on the unanimous recommendation of the special committee, that the proposal is not in the best interest of 7&i shareholders and other stakeholders.
“We are open to engaging in sincere discussions should you put forth a proposal that fully recognizes our standalone intrinsic value and addresses our concerns regarding certainty of closing in the current regulatory environment.
“However, we do not believe, for several critical reasons, that the proposal you have put forward provides a basis for us to engage in substantive discussions regarding a potential transaction.”
Tokyo-listed Seven & i shares spiked 20% when the offer was first announced. Today they fell 1.5%.