LAVAL, Quebec - Alimentation Couche-Tard Inc. (TSX:ATD) announced Wednesday it has withdrawn its proposal to acquire Japanese retail giant Seven & i Holdings Co., Ltd., citing "a lack of constructive engagement" from the target company.
The Canadian convenience store operator had offered ¥2,600 per share in cash, representing a 47.6% premium to Seven & i's unaffected stock price. The proposal was first submitted earlier this year.
In a letter to Seven & i's board, Couche-Tard executives expressed frustration with what they described as "a calculated campaign of obfuscation and delay" during the due diligence process. According to the letter, only limited information was provided about Seven & i's U.S. business, Seven-Eleven Inc. (SEI), despite multiple requests.
The letter, signed by Couche-Tard Founder and Executive Chairman Alain Bouchard and President and CEO Alex Miller, stated that management meetings in Dallas and Tokyo were "tightly scripted" with many questions left unanswered.
Couche-Tard also noted it had proposed alternative transaction structures, including one where it would acquire 100% of Seven & i's business outside Japan and 40% of its Japanese operations, leaving existing shareholders with 60% of the Japanese business.
The Canadian company said it had taken steps to address regulatory concerns, including receiving "multiple indications of interest" from potential buyers for stores that would need to be divested to satisfy antitrust requirements. Couche-Tard had also proposed a reverse termination fee of approximately $1.2 billion to mitigate regulatory risk.
"We continue to believe that a combination of Seven & i Holdings and Alimentation Couche-Tard would create a global leader in convenience," the letter stated, while concluding that further pursuit was not possible "without deeper and genuine further engagement."
Couche-Tard operates nearly 17,000 convenience stores globally, including approximately 13,000 that offer fuel, under brands including Circle K.
The withdrawal announcement was based on a press release statement from the company.
In other recent news, Alimentation Couche-Tard Inc. reported its Q4 FY2025 earnings, revealing a net income of $439 million, or $0.46 per share, which reflects a 5.5% decrease from the previous year. Despite this decline, the company experienced a 6% rise in adjusted EBITDA for the quarter and a 2.4% growth in merchandise and service revenue. Couche-Tard also received clearance from the U.S. Federal Trade Commission to proceed with its acquisition of GetGo Café + Market from Giant Eagle, Inc., with the transaction expected to close soon. As part of the deal, Couche-Tard will divest 35 sites to an FTC-approved buyer. In terms of store expansion, the company opened 110 new locations during the fiscal year and expanded its EV charging network by 40% year-over-year. Analyst discussions highlighted the company's focus on cost control and potential mergers and acquisitions, including ongoing talks with Seven and I Holdings. Couche-Tard's strategic efforts aim to achieve €120 million in synergies by FY2027, indicating a proactive approach to future growth and efficiency.