Japan's Seven & I Holdings announced that the founding Ito family could not secure the necessary financing for a US$58 billion management buyout. As a result, the company is now considering a rival offer from Canada's Alimentation Couche-Tard.
In a statement, Seven & I mentioned, "There is no actionable proposal from Mr. Junro Ito and Ito-Kogyo for 7&i to consider at this time." The company remains committed to exploring all opportunities to unlock value for shareholders and is assessing various strategic alternatives, including Couche-Tard's proposal.
Itochu, a major Japanese trading house, has also stated that it will no longer consider participating in the Ito family's buyout proposal.
The failure of the management buyout increases the likelihood of Couche-Tard successfully acquiring one of Japan's most recognized retailers, which owns 7-Eleven stores. Couche-Tard has reiterated its commitment to reaching a mutually agreeable transaction with Seven & I.
Following this news, Seven & I's stock fell over 12% in Tokyo trading, marking its largest daily decline since becoming a holding company in 2005. In contrast, Itochu shares rose by as much as 6.8%.
Couche-Tard's US$47 billion bid for Seven & I reflects the growing international interest in Japanese assets, driven by improvements in corporate governance and an exit from deflation. After an initial $38.5 billion bid was rejected, Couche-Tard increased its offer to US$47 billion.
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