The convenience store giant behind Circle K is not giving up on hopes of taking over the Japanese owner of its international rival, 7-Eleven.
In a statement on Wednesday, Seven & i Holdings Co. Ltd. reported that it has received a revised confidential, private and non-binding offer from Alimentation Couche-Tard.
The Laval, Que.-based company, which also owns Coache-Tard brand stores and Ingo banners, did not immediately respond to a request to confirm the proposal or provide details about its value.
Bloomberg and Reuters reported that the new offer values Seven & i at $47 billion, about 22 percent more than Couche-Tard's $38.6 billion offer made in August.
The Japanese company rejected an earlier offer, saying it “grossly underestimates” the potential of its convenience store business while failing to fully address U.S. regulatory issues.
The refusal “disappointed” Couche-Tard, which said in September that it remained focused on reaching an agreement.
The company argued that its proposal offered clear strategic and financial advantages and expressed confidence that the two companies could reach a mutually acceptable transaction.
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For Couche-Tard, the acquisition of Seven & i brings many benefits.
Couche-Tard operates in 31 countries and has over 16,800 stores. A successful deal with Seven&i could add 85,800 stores to its network.
Seven & i owns not only the 7-Eleven chain, but also supermarkets, food manufacturers, home goods retailers and financial services companies.
Taking over Seven & I won't be easy, even for a giant like Couche-Tard. There are concerns about competition and dominance in many global markets, and analysts say regulatory approvals may not be difficult to obtain.
“The levels of concentration will almost certainly attract scrutiny from the Federal Trade Commission, which, given the current negative sentiment around consolidation and competition in the food and staples space, will not make this deal easy to complete,” said Neil Saunders, director managing GlobalData, in an email when news of Couche-Tard's offer first broke.
The Japanese sentiment also adds “complexity” to the offering.
“Although the country has made reforms to make takeovers easier, most Japanese companies are very cautious and resistant to change. This also applies to Seven & i, whose complex operating model also makes the transaction difficult,” he said.
Last month, Couche-Tard's fight to buy Seven & i intensified after the Japanese company was classified as “essential” to national security.
If the deal falls through, it won't be the first time Couche-Tard has had to backtrack on its bold ambitions.
The company tried to buy French food company Carrefour SA three years ago but had to abandon takeover talks when French Finance Minister Bruno Le Maire said he would not allow the potential $25 billion deal to proceed because it would threaten food security.
The two companies agreed to instead consider future operating partnerships
