7-Eleven shareholders back management as Japanese owner fights Couche-Tard takeover bid

Globe and Mail

27-05-2025

Seven & i Holdings Co. SVNDF executives faced shareholders for the first time Tuesday since Canadian convenience store giant Alimentation Couche-Tard Inc. ATD-T launched an audacious takeover bid for the Japanese owner of the global 7-Eleven chain.
For almost a year now, Seven & i has been trying to stave off Couche-Tard's offer — now standing at 7.4-trillion yen (US$52-billion) — which would be the largest foreign buyout of a Japanese company in that country's history. This reticence has not only caused frustration in Canada, but also for some Seven & i investors, who have long complained not enough is being done to provide value to shareholders in the world's leading convenience store chain.
But despite these grumblings, Seven & i management secured shareholder backing for all their proposals at an annual general meeting Tuesday, Japan's Nikkei newspaper reported. These include appointing a new executive team, spinning off several subsidiaries and holding an initial public offering for 7-Eleven's U.S. arm by next year.
'7-Eleven has enormous global potential,' said Seven & i CEO Stephen Dacus, according to Nikkei. 'We aim to realize this potential with your co-operation.'
Mr. Dacus, an American former Walmart executive, was appointed to the top job in March, having previously served as an independent director of a special committee evaluating Couche-Tard's takeover approach. That move had attracted criticism, including from activist investor Artisan Partners, which had unsuccessfully urged other shareholders to reject Mr. Dacus and push the company to engage with the Canadians.
Despite the apparent vote of confidence in Seven & i's conservative approach Tuesday, there has been some progress toward a potential sale, which is still favoured by the market at large.
Earlier this month, Couche-Tard was granted access to Seven & i's confidential financial data after months of effort, a critical step in its bid to take over its Japanese convenience store rival.
A non-disclosure pact signed by both companies will facilitate the type of due diligence and discussions on potential regulatory hurdles to a takeover that Seven & i has said is vital before it can consider the offer, but has so far refused to facilitate.
Previously, Couche-Tard had complained about 'very limited' engagement from Seven & i. Couche-Tard founder and chairman Alain Bouchard said in March his team had tried repeatedly to meet with Seven & i executives to talk about a deal but that 'it is hard if not impossible.'
Couche-Tard takes the fight for 7-Eleven to Japan
'The execution of the NDA is a positive step in the constructive engagement process' with Couche-Tard, said Paul Yonamine, chair of Seven & i's independent special committee. 'Unlocking significant value for shareholders and other stakeholders remains Seven & i's top priority,' he said.
The Japanese company is pursuing a dual-track effort in its bid to create that value: Exploring a possible sale to Couche-Tard or going it alone as a more focused business. As part of plans to remain independent, it is selling its underperforming supermarkets and has announced plans to list a portion of its U.S. retail operation to fund a massive stock buyback.
Seven & i has said Couche-Tard is playing down the antitrust risks of a potential merger of the two retail giants, vowing it won't be drawn into 'limbo for multiple years' as regulators decide its fate. The Tokyo company has said its directors have always been open to a merger or go-private transaction, but only if there's a high certainty that a deal will close.
Couche-Tard executives have said there is 'a path to regulatory approval' in the United States. But Mr. Dacus has expressed doubts about that claim.
'They just kept saying, 'Trust us. We can do this. We'll work it out,'' the Seven & i CEO told the Yomiuri Shimbun newspaper in March. He said although Couche-Tard has experience in winning antitrust approval for previous takeovers, many of those have been small deals and nothing on the scale of this potential tie-up. The U.S. Federal Trade Commission will be 'much stricter' in this case, he said.