(Oct 24): Seven & i Holdings Co’s plan to split in two and expand abroad will help the retailer almost double group revenue, chief executive officer Ryuichi Isaka said in an appeal to shareholders as Alimentation Couche-Tard Inc seeks to buy the Japanese convenience-store operator.
The retailer aims to reach ¥30 trillion (US$197 billion or RM856.12 billion) in group sales by the 2030 fiscal year, up from ¥17.7 trillion in 2023, with a greater contribution from convenience-store operations in markets abroad.
Seven & i laid out plans earlier this month that will effectively split the company: A business focused on 7-Eleven, convenience stores and gasoline stations, and another made up of less profitable retail operations. The retailer’s biggest-ever overhaul is designed to boost its value in the face of a buyout proposal from Couche-Tard that values Seven & i at about ¥7.1 trillion.
“Investors should expect global growth,” Isaka told analysts Thursday during an investor presentation. Executives are set to meet with key investors in the next week to lay out plans to restructure and expand. “There are countries and regions we haven’t reached yet, where there’s room for our global network to expand further.”
For Japan, the goal is to surpass ¥6 trillion in annual domestic sales over the same period, Isaka added.
Seven & had rebuffed an earlier, lower offer by the Canadian operator of Circle K stores, saying that it undervalued the company, but hasn’t yet responded to Couche-Tard’s latest proposal to pay US$18.19, or ¥2,777, per share. Shares in the Japanese company were trading at ¥2,249 during morning trading in Tokyo Thursday, below that price.
Earlier this month, Couche-Tard’s top management came to Japan but weren’t able to enter negotiations with Seven & i. Chairman and founder Alain Bouchard said during an interview in Tokyo that he’s confident the Canadian company can address regulatory concerns.
“We have invited them, we have tried to organise a meeting, but it didn’t work, but it will eventually,” Bouchard said. The Canadian suitor is optimistic it can arrange financing and address any regulation requirements for a deal.
This is the third time in two decades Couche-Tard has tried to enter a deal with Seven & i. An acquisition would complete the biggest-ever takeover of a Japanese company.
The unfolding drama is a test of Japan’s willingness to embrace mergers and acquisitions from abroad. Seven & i has sought to fend off the takeover by embarking on a comprehensive overhaul of its global operations, and separately seeking a revised government designation that could raise the hurdle for a foreign buyout.
In North America, Seven & i is interested in making further acquisitions, Joe DePinto, who runs convenience store operations in the region, said during a presentation. Seven & i is pursuing new services such as improved digital services and electric-vehicle charging stations, he said.
“We’re planning for the future but we recognise that this is going to take some time,” DePinto said.
Under the proposed restructuring plan, the convenience-store business will become a global company named 7-Eleven Corp. With growth in Japan and North America weakening, Isaka and his management team are seeking to reassure investors that there’s more potential for greater expansion.
Seven & i shares rose as much as 2.9% on Thursday.
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