PE firm Apollo eyes $9.5 billion stake in Seven & i's buyout
Apollo Global Management Inc. is considering taking a substantial stake in a bid by Seven & i's founding Ito family to take the Japanese convenience store operator private, people familiar with the matter said.
The US private equity giant is discussing a commitment of as much as ¥1.5 trillion ($9.5 billion) for an equity stake in the plan, said the people, who asked not to be identified as the information isn't public.
Under the current proposal, which is subject to change, Apollo would join the Ito family and Itochu Corp., the operator of FamilyMarts in Japan, as key investors. The Ito family is weighing a commitment of around ¥500 billion and Itochu more than ¥1 trillion. Other partners are still negotiating stakes.
The present proposal sees equity stakes making up about ¥4 trillion combined, although that doesn't necessarily mean Apollo will secure majority control because the terms are still being negotiated. The rest of the financing coming from Japan's top banks, the people said. Sumitomo Mitsui Financial Group Inc., Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. are set to participate in the deal.
The valuation of the buyout effort was originally planned for ¥9 trillion — trumping the ¥7.5 trillion takeover bid from Alimentation Couche-Tard Inc. — but may be lowered as the Japanese company's market value remains well below the proposals, the people said. Seven & i's market valuation on Friday hovered around ¥6.3 trillion after stocks dipped over third quarter earnings.
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