Takeover bid for Japan's 7-Eleven owner from Canadian chain
The Japanese operator of 7-Eleven convenience stores is being wooed by a Canadian peer. But securing a deal won’t be easy


Shares in Japan’s Seven & i Holdings, which operates 7-Eleven convenience stores worldwide, have risen after it said it was “open to discussions” with Canada’s Alimentation Couche-Tard if the latter improves its $39 billion takeover bid, say P.R. Venkat and Megumi Fujikawa in The Wall Street Journal. Seven & i rejected Couche-Tard’s previous offer last week on the grounds that its proposal “significantly underestimated the company’s value and potential”. This has led to speculation that Couche-Tard will raise its offer, although there may be antitrust concerns over any deal as both firms have large networks in the US.
Competition will certainly be a “key consideration” in any deal, says Lex in the Financial Times. A merger “would create a global convenience-store leader with more than 100,000 stores”. US regulators will definitely want to become involved. Given 7-Eleven’s operations in the US, both in terms of its own stores and the franchises of other brands that it runs, the combined entity would be America’s “biggest convenience-store operator”. What’s more, because the deal would be the largest foreign takeover of a Japanese firm, Japanese authorities will also be under pressure to scrutinise it.
Is a takeover likely?
For a company such as Seven & i to consider selling itself “would have been unthinkable a little over a decade ago”, says The Economist. Japan’s listed firms “have long been known for their hostility to takeovers and their lack of responsiveness to shareholders’ demands”. However, this is “slowly changing” thanks to reforms to corporate governance. Combined with the decline in corporate cross-holdings, which have traditionally been used to fend off hostile takeovers, this means that listed Japanese firms “can no longer simply dismiss takeover attempts out of hand”.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Opponents of the deal, meanwhile, have a point when they argue that 7-Eleven has “more value than simply its worth to shareholders”, says Bloomberg’s Gearoid Reidy. While not quite a “critical piece of national infrastructure”, 7-Eleven stores provide a “vital local hub in Japanese communities, particularly in rural areas”, with the chain’s “nationwide reach and economy of scale” making its “tasty, nutritious food options available to otherwise isolated elderly people”. Japan’s “often-undervalued brands” should keep such factors in mind when deciding whether to sell up.
In any case, for this deal to present a “real test” of Japan’s receptiveness to foreign acquisitions, Alimentation Couche-Tard “needs to work a lot harder” to come up with a more attractive offer, says Anshuman Daga on Breakingviews. The offer is not only below the level that Seven & i’s share price was trading at as recently as February, but also far short of the ¥3,500 per share break-up value the Japanese chain could command. Any new proposal will also need to include a “large break fee” to compensate for the “extended deal timeline” necessary to allow for a proper regulatory investigation.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
-
Millions of state pension records ‘set to be deleted’ – putting thousands at risk of never getting their money
Thousands of families could miss out on money owed to them if the government deletes historic state pension records.
-
What makes you wealthy in the UK? Could it make you a target in Rachel Reeves’ Budget?
Wealthy Brits could be at risk from a Budget tax raid – but how much money do you need to be considered wealthy in the UK?
-
Pierre-Édouard Stérin wants to make France great again
Conservative billionaire Pierre-Édouard Stérin is seeking to lead a political and spiritual renaissance across the Channel. The planning looks meticulous
-
Global investors have overlooked the top innovators in emerging markets
Opinion Carlos Hardenberg, portfolio manager, Mobius Investment Trust, highlights three emerging market stocks where he’d put his money
-
Pinewood Technologies: a drive for growth
Pinewood Technologies’ platform is one of the best in the business. Investors should buy in
-
'EV maker Faraday Future will crash'
Faraday Future Intelligent Electric is failing dismally to live up to its name, says Matthew Partridge
-
Investors should cheer the coming nuclear summer
The US and UK have agreed a groundbreaking deal on nuclear power, and the sector is seeing a surge in interest from around the world. Here's how you can profit
-
8 of the best houses for sale with follies
The best houses for sale with follies in the grounds – from a five-storey Victorian Gothic tower in Tonbridge, Kent, to a former mill in Oxfordshire with gardens that include a folly on an island in a lake
-
A tale of two Reits – why performance matters for valuation
AEW UK and Regional are two Reits that are valued very differently, despite a shared focus on properties outside London
-
Healthcare stocks look cheap, but tread carefully
Shares in healthcare companies could get a shot in the arm if uncertainty over policy in the US wanes, but are they worth the risk?