Circle K owner Alimentation Couche-Tard (ACT) has made a bid for a potential takeover of Japan’s 7-Eleven convenience chain.
Following the offer on Monday, Seven & i – the Japanese owner of 7-Eleven – saw shares surge by almost 23%, but they tumbled 8% in morning trading on Tuesday.
The offer by the Canadian company makes the 7-Eleven owner the largest-ever Japanese target of a foreign buyout.
Reuters reported that neither ACT nor Seven & i have disclosed the value of the offer.
The news comes after record swings rocked the Japanese stock market earlier this month.
Seven & i said it has set up a committee composed only of independent directors to review Couche-Tard’s proposal which includes buying all of the company’s outstanding shares.
ACT confirmed a “friendly proposal” was sent to Seven & i, adding it was focused on reaching a mutually agreeable transaction.
Cole Smead, the chief executive of Smead Capital which owns shares in the Canadian company, said, “Couche-Tard tried to take over Carrefour, so they’ve been looking for a large acquisition and so to see a deal like this be proposed is not shocking.
“Couche-Tard can greatly increase the margin and profitability of the existing Seven & i Speedway and 7-Eleven locations.
“They have a history of buying assets and improving the margin in the overall business.”
Jefferies said in a research note that Seven & i’s decision to set up an independent committee was positive, but it added that ‘hurdles remain on the scale of the transaction and anti-trust issues.’
On Monday, news of the deal sent Seven & i’s shares surging by almost 23% in Tokyo, valuing the retailer at around $38 billion.
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