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Some of the world's biggest private equity companies have joined the race to own pieces of 7-Eleven's parent company.
Japanese-owned Seven & i Holdings has a sprawling set of businesses, including 85,000 7-Elevens globally and a host of supermarkets. The $39.5 billion company, whose stock is up 30% this year, has been the target of numerous takeover bids in recent months — for all of the business or parts of it.
On Wednesday, Reuters reported that US private equity firms KKR and Bain Capital each offered over $5 billion in first-round bids for some assets of the company. Local private equity firm Japan Industrial Partners offered about $4.8 billion, per Reuters.
The firms are reportedly looking to buy York Holdings — Seven and i's non-core businesses, including superstores, baby goods chain Akachan Honpo, and the company that runs Denny's diner chain in Japan. All three firms were successful in the first round of bidding for these assets, according to Reuters, which cited people familiar with the matter.
Private equity firms typically buy companies or subsidiaries they see as struggling and work to make them profitable before selling them as a whole or in parts after a couple of years.
Representatives of KKR, Bain Capital, Japan Industrial Partners, and Seven & i did not immediately respond to requests for comment.
Reuters reported on Wednesday that Seven & i aims to select the winning bid as early as February, and the decision could be finalized by spring.
Besides the three buyout firms, the 7-Eleven parent also received a $47 billion takeover offer from Canadian multinational convenience store chain Alimentation Couche-Tard. Couche-Tard, which has almost 17,000 stores around the world, bid for Seven & i this summer.
Unlike the private equity firms, Couche-Tard appears to want to buy the whole company, including the 7-Eleven stores.
The deal would amount to the largest-ever foreign takeover of a Japanese company and would give the 7-Eleven chain North American ownership again.
The chain partnered with Ito-Yokado, a Japanese supermarket chain founded in 1973, to build franchised locations in Japan. In the 1990s, Ito-Yokado acquired a majority stake in the company and completed a full acquisition in November 2005. That year, Ito-Yokado reorganized, becoming Seven & i Holdings. 7-Eleven had about 25,000 stores globally before the takeover in 2005, per a trade magazine.
Couche-Tard did not respond to a request for comment.
The company is also contending with a management takeover to fend off the Canadian offer by going private. In November, Seven & I said it received an acquisition proposal from current vice president Junro Ito, his private company, Ito-Kogyo, and the son of founder Masatoshi Ito.
Ito-Kogyo owned 8.2% of Seven & i as of August, making it the second-largest shareholder, according to the company. Master Trust Bank of Japan is the largest shareholder, with a 14.7% stake.
The privatization offer could be worth around $58 billion, Bloomberg reported in November.
Seven & I said in November that it had formed a board of directors committee to consider Ito and Couche-Tard's offers.
