Couche-Tard approaches Seven

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By Urvi Dugar

Sept 8 (Reuters) -

Canadian retailer Alimentation Couche-Tard on Sunday said it is willing to engage in confidential discussions with 7-Eleven operator Seven & i Holdings and is keen on still pursuing an acquisition.

The 7-Eleven operator has said the proposal is not in the best interest of its shareholders and could face antitrust challenges in the U.S.

Couche-Tard said it would consider divestitures that may be required to secure regulatory approvals and believes that it would offer a compelling combination that would address all regulatory concerns in Japan.

"We believe that, working together, we can successfully reach and complete a mutually agreeable transaction," the company said, adding that it hopes this would lead to increased value creation for their Japanese counterpart.

Seven & i, which said last month it had received an offer from Circle-K owner Couche-Tard without naming the price, disclosed the bid was at $14.86 a share and said it would "sincerely consider" any proposals.

The Japanese company said earlier that even if Couche-Tard was to increase the value of the offer "very significantly" it would still be concerned over whether a takeover would be able to progress.

Couche-Tard said it would make an all-cash offer and that financing would not be a condition to close the transaction.

A 7-Eleven spokesperson wasn't immediately able to comment.

The combined entity would be the convenience store industry's biggest by a considerable margin and would be the largest all-cash offer for a company since Elon Musk bought Twitter for $40.2 billion in 2022, according to LSEG data. Mars Inc last month bid $35.2 billion for food group Kellanova.

Bloomberg News earlier reported about the plans and that Couche-Tard has not ruled out going directly to the shareholders with its bid.

While Seven & i is much larger than Couche-Tard in terms of sales, stores, and employees, its shares have underperformed for years, drawing complaints from investors including ValueAct Capital about the company's management and asset structure.

The deal, if agreed, would allow Couche-Tard, which has a market value of about $52 billion, to boost its global reach and improve economies of scale. (Reporting by Urvi Dugar and Devika Nair in Bengaluru; additional reporting by Ritsuko Shimizu in Tokyo; Editing by Chizu Nomiyama and Diane Craft)