7-Eleven rejects $38.5 billion buyout offer from Circle K owner

[SIMONE DEL ROSARIO]

LIKE A SLURPEE OR A FROSTER — THE PLANS BY CIRCLE K’S PARENT COMPANY TO BUY 7-ELEVEN’S PARENT COMPANY HAVE TURNED TO SLUSH.

THE JAPAN-BASED SEVEN AND I REJECTED THE 38.5 BILLION DOLLAR TAKEOVER OFFER BY CANADIAN COMPANY ALIMENTATION COUCHE-TARD. IT’S THE FIRST TIME WE’VE HEARD THE OFFER AMOUNT.

SEVEN AND I SAYS THE BID WAS TOO LOW AND DEVALUED THE COMPANY. IT ALSO SAID COUCHE-TARD’S OFFER DID NOT “ADEQUATELY” ADDRESS REGULATORY ISSUES– INCLUDING LIKELY ANTITRUST CHALLENGES IN THE U.S.

AFTER COUCHE-TARD APPROACHED WITH ITS PLANS LAST MONTH  – SEVEN AND I SET UP A SPECIAL COMMITTEE TO LOOK INTO THE OFFER.

THE COMMITTEE CHAIR SENT A LETTER TO THE CANADIAN COMPANY ON FRIDAY WITH ITS RESPONSE – SAYING QUOTE “We will resist any proposal that deprives our shareholders of the company’s intrinsic value or that fails to specifically address very real regulatory concerns.”

ADDING “We do not believe, for several critical reasons, that the proposal you have put forward provides a basis for us to engage in substantive discussions regarding a potential transaction.”

CURRENTLY IN THE U.S. – GLOBALDATA REPORTS 7-ELEVEN HAS A 14.5 PERCENT SHARE OF THE CONVENIENCE STORE MARKET. IT’S THE LARGEST OPERATOR IN THE COUNTRY. COUCHE-TARDE’S BRANDS HAVE A 4 POINT 6 PERCENT SHARE.

IF THE DEAL WENT THROUGH – IT WOULD HAVE BEEN THE LARGEST-EVER FOREIGN BUYOUT OF A JAPANESE COMPANY.

SOME ANALYSTS BELIEVE THIS ISN’T THE END OF THE TALKS BETWEEN THE TWO CONVENIENCE STORE GIANTS AND BELIEVE COUCHE-TARD HASN’T GIVEN ITS BEST AND FINAL OFFER.

SEVEN & I SAYS IT WOULD ENGAGE IN SINCERE DISCUSSIONS IF A PROPOSAL ADDRESSES ITS CONCERNS. BUT – TO PUT IT IN OTHER WORDS – RIGHT NOW 7-ELEVEN FEELS POLAR POPS JOINING BIG GULPS UNDER ONE ROOF WOULD JUST BE MORE OF AN INCONVENIENCE.