Couche-Tard Seeks to Buy $31 Billion Owner of 7-Eleven Stores

financialpost.com:

(Bloomberg) — Circle K operator Alimentation Couche-Tard Inc. made a proposal to take over much larger rival and 7-Eleven owner Seven & i Holdings Co., in what would be the biggest foreign takeover of a Japanese company. A merger would create the world’s top operator of roughly 100,000 convenience stores.

Valued at the equivalent of $31 billion before news of the offer emerged, Seven & i shares jumped 23% on Monday. The company said the bid was preliminary and non-binding, without disclosing terms. A special committee of independent outside directors will make a “prompt, careful and comprehensive review of the proposal,” Seven & i said in a statement Monday.

Although Couche-Tard is smaller than Seven & i, with about 14,000 stores compared with more than 85,000 for the Japanese retailer, the Canadian company enjoys a bigger valuation of about $58.5 billion. Foreign takeovers of Japanese companies are extremely rare, but recent changes in guidelines for merger and acquisition proposals, and activist investors pushing companies to boost value — including at Seven & i — could boost the odds of a deal that would create a global convenience-store behemoth.

“It all depends on the price, and I guess the weak yen has made it more attractive and anything north of ¥7 trillion, the management would have a tough time rejecting,” said Amir Anvarzadeh, a strategist at Asymmetric Advisors Pte. “But knowing the Seven & i management, you can bet on them resisting this if the price is lower.” 

Shares of Seven & i posted their largest gain on record following a report on the bid by the Nikkei newspaper, which the company later confirmed. Neither offered details on the value of Couche-Tard’s offer. Before today’s jump, the stock had dropped