7-Eleven rejects multibillion-dollar offer from Circle K owner for huge convenience store merger

Hong Kong CNN —

The operator of 7-Eleven has rejected an opening offer from the owner of convenience store rival Circle K, indicating the bid was too low and that its global business was worth more.

In a statement Friday, Tokyo-based Seven & I Holdings, which owns 7-Eleven, said it was “open” to “sincerely consider” any proposal that is in the best interests of its shareholders.

“However, we will resist any proposal that deprives our shareholders of the company’s intrinsic value or that fails to specifically address very real regulatory concerns,” it said in the statement.

Seven & I confirmed that the offer from Canada’s Alimentation Couche-Tard, which operates Circle K, to acquire all of its outstanding stock was made at $14.86 per share in cash, making the potential deal worth $38.5 billion, according to a calculation from Reuters.

The Financial Times reported on Thursday that Seven & I was open to the possibility of a higher offer from its suitor. Shares in Seven & I have rallied since the news of the offer broke last month, pushing its market value above $38 billion.

That had suggested a deal value in excess of any other foreign-led takeover in Japan since Dealogic, a financial analytics firm, started collecting data in 1995. It would also have been the largest cross-border takeover globally this year, according to Dealogic.

The takeover bid has been closely watched in Japan because it came after the government made it harder for companies to ignore unsolicited offers. The changes to corporate takeover guidelines are expected to boost foreign investment into the country.

A potential merger would have expanded Couche-Tard’s already impressive footprint across North America, where it operates Couche-Tard and