The operator of 7-Eleven has rejected an opening offer from the owner of convenience store rival Circle K, indicating the bid was too low and that its global business was worth more.
In a statement Friday, Tokyo-based Seven & I Holdings, which owns 7-Eleven, said it was “open” to “sincerely consider” any proposal that is in the best interests of its shareholders.
“However, we will resist any proposal that deprives our shareholders of the company’s intrinsic value or that fails to specifically address very real regulatory concerns,” it said in the statement.
Seven & I confirmed that the offer from Canada’s Alimentation Couche-Tard, which operates Circle K, to acquire all of its outstanding stock was made at $14.86 per share in cash, making the potential deal worth $38.5 billion, according to a calculation from Reuters.
The Financial Times reported on Thursday that Seven & I was open to the possibility of a higher offer from its suitor. Shares in Seven & I have rallied since the news of the offer broke last month, pushing its market value above $38 billion.
That had suggested a deal value in excess of any other foreign-led takeover in Japan since Dealogic, a financial analytics firm, started collecting data in 1995. It would also have been the largest cross-border takeover globally this year, according to Dealogic.
The takeover bid has been closely watched in Japan because it came after the government made it harder for companies to ignore unsolicited offers. The changes to corporate takeover guidelines are expected to boost foreign investment into the country.
A potential merger would have expanded Couche-Tard’s already impressive footprint across North America, where it operates Couche-Tard and Circle-K stores, and Europe, where it also runs Ingo fuel retailers.
Analysts had previously said the combined entity would have controlled nearly a fifth of the US convenience store market, which was likely to attract scrutiny from America’s antitrust regulator.
Seven & I addressed that concern on Friday, saying the proposal did not “adequately acknowledge the multiple and significant challenges such a transaction would face from US competition law enforcement agencies in the current regulatory environment.”
The Tokyo-based group operates more than 83,000 stores around the world, including 7-Eleven shops and the Speedway chain of gas stations in the United States. It bought Speedway from Marathon Petroleum for $21 billion in 2021, boosting its presence in North America.
Although 7-Eleven traces its origins to Dallas, Texas, it was the late Japanese entrepreneur Masatoshi Ito who is credited with turning it into a ubiquitous global brand. Ito died last year at the age of 98.
