- One of Japan’s most influential executives supports the rejection of Alimentation Couche-Tard’s (TSX:ATD) takeover bid of 7-Eleven’s owner
- Suntory Holdings CEO Takeshi Niinami said in a Reuters interview that Seven & i Holdings (PINL:SVNDF) responded fairly by rejecting the US$31 billion offer
- He admitted that the offer made Japanese executives “look over their shoulders” worried that a similar challenge could emerge for their own companies
- Alimentation Couche-Tard Inc. opened trading at C$76.94 per share
One of Japan’s most influential executives supports the rejection of Alimentation Couche-Tard’s (TSX:ATD) takeover bid of 7-Eleven’s owner.
Suntory Holdings CEO Takeshi Niinami said in a Reuters interview that Seven & i Holdings (PINL:SVNDF) responded fairly by rejecting the US$31 billion offer.
Niinami, the chairman of the Keizai Doyukai business lobby and was an economic advisor to current and former prime ministers, told Reuters “I think Seven & i responded fairly,” adding that it “demonstrates that Japan’s corporate governance has been advancing.”
He admitted that the offer made Japanese executives “look over their shoulders” worried that a similar challenge could emerge for their own companies.
Governance reforms and Japan’s recovery from deflation are compelling companies to prioritize returns on equity. He mentioned that the weak yen has acted as a catalyst for change, increasing the pressure on companies to generate value or face the risk of being acquired.
Couche-Tard submitted a friendly, non-binding proposal to Seven & i Holdings in August. The deal was valued at a potential equivalent of US$31 billion. Seven & i Holdings quickly rejected the offer, stating it “grossly” undervalued its intrinsic value.
Despite the rejection, Couche-Tard explained its case, stating it has “[A] strong conviction that a combination with Seven & i has clear strategic and financial benefits for both companies’ customers, employees, franchisees and shareholders.”
Seven & i responded indicating its willingness to negotiate if Couche-Tard presents a proposal that “[F]ully acknowledges Seven & I’s intrinsic standalone value.”
Alimentation Couche-Tard Inc. operates in 31 countries and territories, with more than 16,700 stores, of which approximately 13,100 offer road transportation fuel. With its well-known Couche-Tard and Circle K banners, it is one of the largest independent convenience store operators in the United States.
Alimentation Couche-Tard Inc. (TSX:ATD) opened trading at C$76.94 per share and has risen 5.25 per cent since this time last year.
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(Top photo: Alimentation Couche-Tard Inc.)