Shares of Alimentation Couche-Tard Inc (TSX:ATD.A) jumped more than 10% on Wednesday in Toronto after the Canadian convenience store operator said it had withdrawn its proposal to acquire Japan’s Seven & i Holdings Co Ltd, citing a lack of constructive engagement.
Couche-Tard, which operates Circle K stores globally, said in a statement that it had spent nearly a year in discussions with Seven & i, but ultimately decided to walk away from the talks.
“Since entering into the NDA, there has been no sincere or constructive engagement from 7&i that would facilitate the advancement of any proposal,” Couche-Tard wrote in a letter to Seven & i’s board. The Quebec-based company had proposed acquiring all of Seven & i’s business outside Japan and a 40% stake in its domestic operations.
Seven & i, which owns the global 7-Eleven franchise along with a broad portfolio of supermarkets, food and financial services businesses, disputed Couche-Tard’s characterization of the discussions. The company said it “consistently engaged in good faith and constructively to explore the possibility of reaching a deal.”
Jefferies analysts called the outcome “neutral,” noting that Seven & i remains committed to a standalone strategy.
Had the deal gone ahead, it would have cemented Couche-Tard’s position as a dominant player in the global convenience store industry.