Following the report from Japanese media that 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 at a value beyond $47 billion offered by another bidder, Couche-Tard.
Kiatnakin Phatra Securities (KKPS) wrote in a short note, stating that based on preliminary discussions with the company, CP Group is likely uninterested in participating in a Management Buyout (MBO) for two primary reasons: (1) most of the infrastructure and products are developed by CPALL, and (2) any new owner (if any) must respect existing agreements unless a joint agreement is reached.
Nonetheless, this situation might become an overhang on CPALL’s stock price if CP Group decides to join the MBO, depending on how much more they would need to pay above Couche-Tard’s offer of US$14.86 per share.
Sensitivity Analysis: At an interest rate of 4% for the borrowed funds, for every 10% premium over US$14.86 per share for 1% of Seven & i’s shares, CPALL could incur a loss of approximately 50-100 million baht, equating to about 0.3-0.5% of KKPS’ 2025 earnings projections.
Read: Thailand’s CP Group Approached for Investment in Seven & i Management Buyout
