Japan’s Seven & i founding family is reportedly seeking Thailand’s Charoen Pokphand (CP) Group to participate in a management buyout of the Japanese retail giant, as disclosed by national broadcaster NHK on Thursday.
This initiative is aimed at privatizing Seven & i to resist a potential $47 billion acquisition bid from Canada’s Alimentation Couche-Tard.
In efforts to secure a takeover, the founding family has engaged with CP Group, among others, in a bid to privatize Seven & i in a deal estimated to value the expansive convenience store conglomerate at around $58 billion. The proposal would constitute Japan’s largest management buyout if successfully executed.
NHK highlighted that negotiations with CP Group are ongoing to finalize an investment worth hundreds of billions of yen. While Seven & i refrained from commenting on the report, a spokesperson for CP Group stated they do not provide speculation-based responses.
Having already approached entities like Japanese trading house Itochu and U.S. asset manager Apollo Global Management for potential funding, CP Group, known for operating 15,000 7-Eleven stores in Thailand, could play a crucial role in the family’s takeover endeavor.
The prospective buyout plan aims to retain Seven & i’s existing leadership structure and alleviate the need to divest underperforming assets, although analysts suggest it may serve as leverage to elicit a superior offer from Couche-Tard.
Seven & i has faced shareholder pressure to dispose of non-core businesses, leading to the establishment of a holding company last October to consolidate 31 subsidiaries. Sources have indicated interest from U.S. private equity firms KKR and Bain Capital, with bids exceeding $5 billion for the spin-out.
About Seven & i situation
Seven & i Holdings, the Japanese retail giant behind 7-Eleven convenience stores, is currently the center of a potential bidding war and strategic restructuring. The company is exploring the sale of its non-core assets under York Holdings, which include supermarkets and restaurants, signaling a focus on its highly profitable convenience store business. This move comes amidst significant investor pressure, particularly from activist investor ValueAct Capital, who have been urging the company to streamline operations and maximize shareholder value.
