Canada’s Alimentation Couche-Tard has provided updates on its store divestiture plan in a bid to secure US regulatory approval for its proposed merger with Japan’s Seven & I.
Couche-Tard stated there is a clear path to regulatory approval in the US market and that it was willing to divest a specific base number of stores to facilitate the deal.
The company has also reached out to potential buyers of the stores to be divested after receiving consent from Seven & I.
“We firmly believe that the divested business will be a strong and extremely viable competitor in the US and will attract interest from credible buyers,” the Canadian giant said.
“Couche-Tard would be committed to standing up the business with the infrastructure and leadership required to create a great business,” it added.
The US convenience store market includes more than 150,000 stores nationwide, while Couche-Tard and Seven & I have a combined 20,000 locations under the Circle K and 7-Eleven banners.
Couche-Tard added it plans to fund the transaction with a combination of debt and equity, stressing that it has the operational and financial flexibility to continue to invest in both the Seven & I and Couche-Tard businesses.
In a letter to shareholders on Monday, Seven & I said it had initiated talks with Couche-Tard to map out the viability of a divestiture process and identify potential buyers.
The Japanese firm announced last week that lead outside director Stephen Dacus would succeed Ryuichi Isaka as CEO on May 27 to lead its recovery and respond to the $47 billion takeover offer.
In addition, Joseph Michael DePinto stepped down as a director of the holding company while remaining the CEO of 7-Eleven Inc.
Artisan Partners, a US-based investor in Seven & I, has opposed the CEO succession plan and urged the company to reconsider Couche-Tard’s takeover offer, according to Reuters.
The special committee and Dacus previously intended to reject Couche-Tard’s offer of $18.19 per share. However, the company’s shares closed at $14.18 on Friday in Tokyo, about 22 per cent below Couche-Tard’s latest offer.
Artisan Partners said it would vote against Dacus at the company’s upcoming annual general meeting, as well as against Seven & I Vice President Junro Ito after he failed to secure financing for a $58 billion management buyout last month.
