Seven & i Family in Talks to Take Company Private
Management Buyout to Fend Off US$47 Billion Takeover
The founding family of Japan’s Seven & i is in talks to take the company private through a management buyout to fend off a US$47 billion takeover from Canada’s Alimentation Couche-Tard. According to Japanese national broadcaster NHK, the family is seeking an investment from Thailand’s Charoen Pokphand (CP) Group to support its takeover effort.
CP Group Approached as Potential Partner
CP Group, which operates 12,000 7-Eleven stores in Thailand, is the latest candidate approached by the family to support its takeover effort. The proposed CP investment would be in the order of hundreds of billions of yen and negotiations to determine the figure are ongoing. If successful, the deal would be the largest management buyout in Japanese history.
Other Potential Partners Sounded Out
The family has also reportedly sounded out Japanese trading house Itochu and US asset manager Apollo Global Management as potential partners. The move would keep Seven & i’s current management in place and relieve pressure to offload unprofitable assets. However, some analysts have suggested that the management buyout may be intended to induce a higher bid from Couche-Tard.
Pressure to Divest Non-Core Assets
Seven & i has been under pressure from shareholders in recent years to divest its varied non-core assets, which span supermarkets, speciality stores, and restaurant franchises. In October, the company announced the establishment of a holding company set to house 31 of its subsidiaries. Sources have told Reuters that US private equity powerhouses KKR and Bain Capital each bid more than US$5 billion for the spin-out.
Conclusion
The proposed management buyout by Seven & i’s founding family is a significant development in the company’s history. If successful, it would be the largest management buyout in Japanese history and would allow the company to maintain its current management structure. The deal would also relieve pressure to offload unprofitable assets and may induce a higher bid from Couche-Tard.
Frequently Asked Questions
Q: What is the proposed management buyout?
A: The founding family of Seven & i is seeking to take the company private through a management buyout to fend off a US$47 billion takeover from Canada’s Alimentation Couche-Tard.
Q: Who is the potential partner for the management buyout?
A: Thailand’s Charoen Pokphand (CP) Group is the latest candidate approached by the family to support its takeover effort.
Q: What is the proposed investment from CP Group?
A: The proposed CP investment would be in the order of hundreds of billions of yen and negotiations to determine the figure are ongoing.
Q: What would be the impact of the management buyout?
A: The deal would keep Seven & i’s current management in place and relieve pressure to offload unprofitable assets. It may also induce a higher bid from Couche-Tard.
