JAPAN NEWS

 

Seven & i Holdings Co., the operator of the 7-Eleven convenience store chain, announced Thursday that the founding Ito family has told the company that it has been unable to secure funding for its proposed management buyout of the company.

MBOs are a method by which a company’s management acquires the company through purchasing shares.

Itochu Corp., which was considering investing up to ¥1 trillion, also officially announced Thursday that it had decided not to join the MBO scheme, saying, “We have completed our consideration into this plan.”
Itochu apparently has seen little scope for mutual benefit with convenience store chain FamilyMart, an Itochu subsidiary.

Seven & i in August said it had received a takeover bid from leading Canadian convenience store operator Alimentation Couche-Tard Inc. It had expressed its reluctance to accept the proposed acquisition.

Seven & i Vice President Junro Ito, a member of the founding family, and Ito-Kogyo Co., the family’s asset management company, had proposed the MBO of Seven & i to counter the Canadian firm’s takeover bid.

With the proposed acquisition was estimated to be worth a total of between ¥8 trillion to ¥9 trillion, the Ito family approached megabanks and U.S. investment funds in addition to Itochu for financing and investment.

However, their plan to secure the necessary financing fell through when they were unable to obtain the cooperation of Itochu, which had been a strong candidate for investment.

Seven & i announced it is continuing “to assess a full range of strategic alternatives, including the proposal from [Couche-Tard].”
However, Seven & i, which has shown a strong aversion to takeovers, apparently intends to increase its corporate value on its own.