People pass a 7-Eleven convenience store in New York, on March 19.Ted Shaffrey
The Japanese parent company of the 7-Eleven convenience-store chain has retained prominent financial and legal advisers as it mulls a potential sale to Canada’s Alimentation Couche-Tard Inc. ATD-T, parent of Circle K.
Mitsubishi UFJ Morgan Stanley Securities Co. Ltd. (MUMSS) is serving as financial adviser to Seven & i Holdings Co. Ltd. SVNDY and Nishimura & Asahi, one of Japan’s largest law firms, is serving as legal adviser, according to a source familiar with the matter. The Globe and Mail is not identifying the source because they are not authorized to discuss the appointments publicly.
Seven & i did not respond to a request for comment on the appointments.
Laval, Que.-based Couche-Tard has retained Goldman Sachs as a financial adviser but has not disclosed whether it has retained any external legal counsel.
Hiring MUMSS and Nishimura demonstrates how seriously the Japanese company is taking the Canadian proposal, which was first disclosed last month. Seven & i rejected Couche-Tard’s initial bid on Friday, though the company added it remained “open to engaging in sincere discussions should you put forth a proposal that fully recognizes our stand-alone intrinsic value and addresses our concerns regarding certainty of closing in the current regulatory environment.”
Couche-Tard is the first foreign company to attempt the acquisition of a Japanese business since Tokyo issued a new set of guidelines for mergers and acquisitions last year. Experts say the new guidelines are intended to make it easier for foreign buyers to get deals done in Japan and were issued in response to decades of criticism that Japanese corporate takeover rules were overly protectionist.
However, the new guidelines have never been tested by a major transaction and any transaction between Couche-Tard and Seven & i would be of historic proportions. If Couche-Tard ends up acquiring Seven & i, it would be the largest acquisition the company has made since it was founded in 1980.
It would also be the largest acquisition of a Japanese company by a foreign one in history.
While Japan represents the single largest market for 7-Eleven, with more than 21,000 locations in the country, analysts have said Couche-Tard is at least partly motivated by the company’s substantial U.S. footprint, including several thousand Speedway stores that Couche-Tard tried and failed to acquire in 2020.
Seven & i ultimately paid US$21-billion in cash to acquire the 3,900-location Speedway chain.
This is Couche-Tard’s second attempt to acquire 7-Eleven. In 2005, Couche-Tard founder and then chief executive officer Alain Bouchard flew to Tokyo to personally pitch a transaction that was immediately rebuffed.