Canada's Couche-Tard makes preliminary bid for Japan's Seven & i

Japan's Seven & i, owner of the 7-Eleven convenience stores, said it has received a preliminary takeover offer from Canada's Alimentation Couche-Tard, potentially the biggest purchase of a Japanese company by an overseas firm.

News of the offer sent shares of the Tokyo-listed company surging by almost 23%, valuing it at around 5.6 trillion yen ($38 billion). Couche-Tard, which operates Circle-K convenience stores, is valued at roughly $58 billion.

Seven & i has formed a special committee to review the proposal, it said in a statement on Monday, adding no decision has been made by either that committee or its board of directors. The announcement followed a report on the deal by the Nikkei newspaper.

Alimentation Couche-Tard did not immediately respond to a request for comment outside of its usual working hours.

The talks are "at a very early stage," said a source familiar with the matter who declined to be identified.

A deal for the whole company would be the largest ever buyout of a Japanese firm by an overseas company, LSEG data shows, after the 2018 deal for Toshiba's memory chip business by a consortium led by private equity firm Bain.

For investors, it would also mark the latest milestone in the growing attractiveness of once-shunned Japanese assets.

Changes in corporate governance have helped underscore a sense of renewed relevance for Japan and Japanese companies, said Duncan Clark, chairman and founder of investment advisory firm BDA.

"We've seen this with the number of financial institutions setting up shop or hiring in Japan," Clark said.

Japan was home to one of the world's best-performing stock markets last year and this year the Nikkei index has hit a series of record highs as investors have applauded governance