7-Eleven acquisition case takes a new turn! Seven & i founding family's financing fails, Canadian giant ACT may take over?

As the founder of the Japanese retail giant and 7-11 parent company, Seven & i Holdings, the Ito family failed to secure financing for a $58 billion management buyout plan, the company's stock price plummeted sharply, also bringing hope to the Canadian convenience store giant Alimentation Couche-Tard (ACT) in its bidding. In a statement, the company said, "Currently, Junro Ito and Ito Yokoye have not presented any specific proposal to Seven & i that is actionable." The statement added that the company will "continue to evaluate a range of strategic options," including ACT's $47 billion acquisition offer. It is understood that ACT, which owns the Circle K convenience store chain, had initially bid $38.5 billion, but raised its offer after being rejected by Seven & i. "This gives ACT a new opportunity, as there is now no competition, and the board can no longer rely on the management buyout plan," analyst Travis Lundy said. If ACT successfully acquires a controlling stake in Seven & i, it would be the largest acquisition deal in Japanese corporate history. Earlier, Itochu, which owns the competitor convenience store chain FamilyMart, announced that it had ceased considering participating in the acquisition proposal from the Ito founding family of Seven & i. This caused Seven & i's stock price to plunge 11.7% on the Tokyo stock market, marking the largest single-day decline in over a decade. Itochu's stock price, on the other hand, rose 5%. Artisan Partners, an American investment company holding 1.11% of Seven & i's shares, has strongly criticized its management and urged the company to consider a competitive tender for the acquisition proposal. The fund declined to comment on the Ito family's failure to secure financing for its management buyout plan. Analysts say that Seven & i's handling of ACT's acquisition offer is widely seen as a test case for Japanese companies facing pressure to strengthen corporate governance. Lundy said, "Investors may question whether Seven & i has done everything it can to make ACT's acquisition offer viable." After receiving ACT's acquisition offer last year, the Ito family began discussions to privatize the convenience store operator, which would be the largest management buyout deal in history if successful. ACT reiterated its commitment to reaching a mutually agreed deal with Seven & i. Consumer analyst Hiroaki Watanabe stated that ACT may be primarily interested in Seven & i's North American stores, as most franchise operators in Japan would not welcome foreign owners. Watanabe said, "The way Japanese convenience stores are run is challenging even for the best domestic companies, let alone foreign companies." In September last year, Seven & i was identified as a "core" asset critical to Japan's national security, although the Japanese Ministry of Finance stated at the time that it would not set obstacles to the acquisition. Reports also suggest that Seven & i is close to reaching an agreement to sell its non-core assets to the private equity firm Bain Capital.