Seven & i private branded cooked meals at a 7-Eleven convenience store, operated by Seven & i Holdings Co., in Tokyo, Japan, on Thursday, Jan. 18, 2024.
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Shares of Japan’s Seven & i Holdings plunged as much as 12.44% Thursday after the company said the founding family had failed to secure the financing needed to buyout the convenience store operator.
This translates to a loss in market cap of about over $5 billion.
Earlier on Thursday, Yomuiri newspaper reported that Seven & i had abandoned the management buyout plan, stated to be worth over 8 trillion yen ($53.69 billion).
“They [the founding family] have been unable to secure the financing required to submit a definitive proposal to acquire 7&i. As a result, there is no actionable proposal from Mr. Junro Ito and Ito-Kogyo for 7&i to consider at this time,” the company said in a filing.
Junro Ito is Seven & i’s vice president and the son of late Masatoshi Ito, founder of Seven & i. Ito-Kogyo is a company affiliated with the vice president, and is Seven & i’s second-largest stakeholder with an 8.2% stake.
On Wednesday, Reuters reported that trading house Itochu had decided not to participate in the buyout. Itochu had considered investing 1 trillion yen in the deal but then backed out as there were few synergies between its food and beverage business and Seven & i, Nikkei reported.
Local media in November reported that the founding family was teaming up with “three Japanese megabanks and major American financial institutions,” to launch the buyout.
Seven & i in 2024 rejected a buyout bid from Canadian convenience store operator Alimentation Couche-Tard. Couche-Tard had initially made an offer of $14.86 per share to take over Seven & i in August last year. The offer was rejected, with Seven & i saying it “grossly undervalues” the company.
The company then reportedly raised its offer in October by over 22% to $18.19 per share, valuing Seven & i at 7 trillion Japanese yen, or about $47 billion.
Seven & i said that it “remains committed to exploring all opportunities to unlock value for shareholders and continues to assess a full range of strategic alternatives, including the proposal from Alimentation Couche-Tard, Inc.”
Correction: This story has been updated to reflect that Seven & i rejected the first bid from Alimentation Couche-Tard.