Seven & i pushes back against Couche-Tard’s reasons for deal talks ending

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The parent company of 7-Eleven has pushed back against the reasons Alimentation Couche-Tard Inc. gave for why a takeover deal never materialized.

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Couche-Tard said last week that it was ending a yearlong effort to buy Seven & i Holdings Co. Ltd., saying there had been no sincere or constructive engagement from the Japan-based company over a potential deal.

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Seven & i’s special board committee said Couche-Tard’s claims were highly misleading as it rejected the characterization in a letter issued Tuesday.

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“We consistently engaged in good faith, and we are disappointed that 1/8Couche-Tard3/8 has decided to walk away from these discussions. We are further disappointed that they have done so in a way that completely mischaracterizes both our engagement and the significant hurdles this transaction faced that they were not committed to resolving,” the letter said.

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It said that from the start, Couche-Tard didn’t take competition concerns seriously, and didn’t present a credible plan as to how those concerns would be addressed.

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Given the scale of the two convenience store chains, Seven & i noted that regulators would likely require a “very significant divestiture” before approving a deal, but it said Couche-Tard was not able to provide a plan on who could be the buyer or how such a deal would work.

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Couche-Tard said in its letter last week that it received multiple indications of interest from potential buyers of divested assets, but that Seven & i didn’t provide the needed additional information to move those talks forward.

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The Laval-based company also said in its letter that there was not only a lack of engagement, but also a “calculated campaign of obfuscation and delay” from Seven & i that reinforced its governance concerns.

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Couche-Tard initially met with Seven & i on July 23, 2024, with the 7-Eleven owner making talks public in August. The company rejected Couche-Tard’s initial offer reportedly worth about US$38.6 billion, leading Couche-Tard to submit a higher offer that media reports suggest was worth US$47 billion.

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Soon after the second bid, Junro Ito, a member of the family that helped found the company, put forward a new management buyout proposal. But Seven & i resumed talks with Couche-Tard after the family-led effort failed to secure financing.

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Even as talks resumed, Seven & i announced in March a plan to sell billions of dollars worth of its non-convenience store assets to Bain Capital and launch an initial public offering of its North American 7-Eleven business.

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The two sides went back and forth with concerns about regulatory approval and a lack of engagement, until on July 16 Couche-Tard said it was ending its bid.

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Seven & i said it did engage faithfully in the process, and held ten virtual meetings along with the two that Couche-Tard referenced. It said its governance was up to the task, and it was ready to go the distance to determine if a solution could be found.