The president at Seven & i Holdings has said he will seriously examine an acquisition proposal from a major Canadian convenience-store operator.
The Japanese retail giant is also set to discuss the latest offer at a special committee comprising outside directors.
The proposal from Alimentation Couche-Tard is said to be about 47 billion dollars, 20 percent higher than its previous bid.
Seven & i Holdings President Isaka Ryuichi said his company is considering the offer in order to raise its corporate value. He said the special committee will objectively analyze the bid.
The firm earlier announced a restructuring plan that concentrates management resources on its convenience-store business. The plan would place Ito-Yokado supermarkets and the firm’s other non-convenience store operations under an intermediate holding company.
The company also said it will withdraw from its money-losing online supermarket operations and close about 400 convenience stores in the United States.
Isaka said that focusing on capital efficiency is the right way to raise the company’s value, which would result in shareholders valuing the firm at a higher level than the acquisition proposal.
UBS Securities senior analyst Kazahaya Takahiro noted that Seven & i has been rushing its planned reform.
“Because Couche-Tard made a buyout proposal, the firm probably decided that it needs to move the reform forward significantly, or that it needs to make a more in-depth management decision,” Kazahaya said.
“Seven & i’s share price is in decline because of its sluggish convenience-store business. So it will be crucial whether the operator will be able to rebuild it.”
Kazahaya said that if the company does not accept the Canadian firm’s new proposal, it would have to raise its value soon. He said Seven & i’s management has never been questioned as much as it is right now.