7-Eleven owner shares surge after reports on takeover tussle

TOKYO

Shares in the Japanese owner of 7-Eleven jumped yesterday after media reports said it was seeking to strengthen its hand in a takeover battle, including selling a stake in its banking unit.

Seven & i, Japan's biggest retailer, last month rejected an initial buyout offer from Canada's Alimentation Couche-Tard (ACT), saying the $40 billion proposal undervalued its business and could face regulatory hurdles.

But ACT, which owns the rival Circle K brand, has vowed to pursue the buyout, which would be the biggest ever foreign takeover of a Japanese firm.

Shares in Seven & i ended the morning 2.55 percent higher at 2,250.5 yen in Tokyo, having surged more than 3 percent at one point.

The Financial Times said yesterday that Seven & i "is hunting for ways to boost its share price and bolster its defences" ahead of an expected second bid from ACT.

That followed reports in Japanese media last week that the group was accelerating a plan to sell its supermarket operations, including the national "Ito-Yokado" chain.

Such a move would allow it to focus on 7-Eleven, the world's biggest convenience store chain, which operates more than 85,000 outlets with around a quarter of those in Japan, the Nikkei business daily said on Oct. 4

Public broadcaster NHK also reported last week that Seven & i was considering selling a stake in its banking unit in order to increase the group's value.

While 7-Eleven began in the United States, the franchise has been wholly owned by Seven & i since 2005.

The Japanese Finance Ministry last month designated Seven & i a "core" industry, a move that could make the takeover more complicated.

Meanwhile, Quebec's public pension manager said "Couche-Tard knows that we will always accompany them in these endeavours if necessary" in an interview with Bloomberg News.

ACT operates more than 16,700 outlets in 31 countries and territories.