A 7-Eleven store in Japan. Shares in the convenience chain's parent company dropped on Thursday after Canadian rival Alimentation Couche-Tard Inc. withdrew a bid for the business.Todd Korol/The Globe and Mail
Shares in the Japanese owner of the 7-Eleven convenience store chain fell Thursday after Alimentation Couche-Tard Inc. ATD-T said it had abandoned its bid for Seven & i Holdings.
By the end of the day’s trading in Tokyo, Seven & i’s stock price had fallen by 9 per cent to 2,008 yen ($18.50), 23 per cent below what its Canadian rival was offering as part of the multibillion-dollar takeover effort.
Seven & i had aggressively resisted Couche-Tard’s roughly US$46-billion offer, even as some minority shareholders encouraged greater engagement amid a flagging stock price and an uncertain future.
“We are very disappointed in what appears to be a lack of willingness to engage from Seven & i,” said Manoj Jain, co-founder and co-CIO of Hong Kong-based Maso Capital, a Seven & i shareholder.
“We believe there is significant value to be realized in a combination and have expressed this view to the management and the board.”
Executives at 7-Eleven suggested a U.S. public offering as an alternative recovery plan to the Canadian buyout, but it is unclear if that will go ahead with Couche-Tard out of the picture.
Akihito Nakai, an independent retail analyst, said if Seven & i does list its North American assets, that entity could be targeted by Couche-Tard. If Seven & i opts not to, Canadians could make another run at the whole company.
He described the current situation as a “ceasefire,” not necessarily an end to the friction.
Japanese media covered the news prominently Thursday, even as the country prepares for upper-house elections Sunday. Many Japanese consumers had expressed concerns about a foreign company taking over a brand so indelible in people’s lives, prompting Couche-Tard to promise not to change how Japanese 7-Elevens – widely seen as superior to convenience stores in the West – operate and offering reassurances to the government about the stores’ role in disaster relief.
The case has exposed the difficulties foreign companies have in pursuing buyouts of Japanese businesses, despite pressure from investors and efforts by the government to make this easier.
Corporate Japan does not face any such limits overseas, with Japanese companies closing in on 5,000 deals within and outside the country so far this year, according to Tokyo-based consultancy Recof.
Among these was a US$1.3-billion deal this week for Mitsubishi Corp. to acquire salmon farms in Canada and Norway from Grieg Seafood, creating the world’s second-largest salmon farming group, and Nippon Steel’s takeover of U.S. Steel, which finally received political approval from the White House last month.
With files from Reuters