3 Big Numbers is a weekly column that looks at a few key details from around the c-store industry.
On Wednesday, Alimentation Couche-Tard sent a letter to Seven & i Holdings announcing it was withdrawing its takeover bid for the international conglomerate.
This brought an unceremonious end to what had been a long-running courtship. Circle K parent company Couche-Tard shared some final accusations of bad faith engagement and gave a little more context about the whole saga, adding that it withdrew the bid due to a “lack of constructive engagement by Seven & i.” Seven & i responded with a short announcement in which it accepted the end of talks, shared vague disappointment in Couche-Tard’s “mischaracterizations” and touted its own ongoing initiatives.
And then it was over.
In this week’s “3 Big Numbers,” we pay our respects to the end of a short-lived era as Couche-Tard bows out of its pursuit of Seven & i.
332
The number of days between Couche-Tard making its first bid for Seven & i and withdrawing from the discussions.
Last August, Couche-Tard announced it was pursuing Seven & i. Almost one year later, the Canadian company threw in the towel.
A lot has changed in that time. In its response to Couche-Tard’s withdrawal, Seven & i noted that “there have been significant changes in the global economy, exchange rates, and financing markets. As [Alimentation Couche-Tard] noted on its most recent earnings call, conditions in key markets have deteriorated since last year.”
With the worry about this deal now in the rearview mirror, both companies can move forward. Seven & i has a number of initiatives in the pipeline it’s working on, including taking its North American arm public and improving its food and delivery programs.
23%
The gap between Couche-Tard’s proposed buyout price per share and the closing price of Seven & i after Wednesday’s news.
Couche-Tard’s President and CEO Alex Miller and Chairman of the Board Alain Bouchard noted in their letter that Couche-Tard had offered 2,600 yen per share for Seven & i. By the time trading on the Tokyo Exchange closed on Thursday, Seven & i’s stock price was 2,008 yen per share — around a 23% difference.
While it’s impossible to know how well the stock will be doing in another year or two, right now the breakdown in talks has left a lot of money on the table for shareholders. It seems like many of them voted with their wallets via the stock market.
More than 54 million shares changed hands Thursday on the Japanese exchange, while a normal day’s trading doesn’t even reach 7 million shares. Trading was even briefly halted during the day.
Couche-Tard, meanwhile, actually saw a stock price boost from the news. It’s possible that investors were worried about how much benefit the company could wring out of a deal for Seven & i.
100%
How much of Seven & i Couche-Tard wanted to purchase.
This one sounds obvious, we know. Couche-Tard made a bid for Seven & i, so of course they wanted the whole thing.
But in the letter to Seven & i withdrawing from talks, Couche-Tard leaders shared that there were actually two other options on the table.
Couche-Tard advanced a proposal that would see it buying 40% of the Japanese operations and all of Seven & i’s international operations. Seven & i, meanwhile, suggested a deal where Couche-Tard would get 7-Eleven Inc., the North American branch of the company, and the Japanese retailer would get equity ownership in the Canadian retailer.
It’s interesting to note that Miller and Bouchard said an agreement for only 7-Eleven Inc. “would undermine the operational prospects of the combined business.” Seven & i plans to spin off that part of the business in an IPO next year, a move some experts said could clear the way for Couche-Tard to buy just those stores. The company’s letter makes that sound a lot less likely.
Editor’s note: This article was updated to correct the number of days since Couche-Tard’s offer for Seven & i.
