Bidding race for 7-Eleven owner touches $58 billion as founding family enters fray

TOKYO: Japan's Seven & i Holdings has received a buyout proposal from a member of its founding Ito family, it said on Wednesday, a potential $58 billion white-knight bid as it weighs a rival offer from Canada's Alimentation Couche-Tard.

The offer for Ito-Kogyo, a company linked to Vice President Junro Ito and a top shareholder in 7-Eleven owner, is non-binding and under review by the same special committee set up to assess Couche-Tard's takeover bid.

Separately, the Financial Times reported that "preliminary and limited" talks between Seven & i and Couche-Tard have begun, citing people familiar with the matter - a development that comes after months of reluctance on the part of the Japanese company to talk about a deal. Seven & i declined to comment on the FT report.

Sources have previously said Couche-Tard has sweetened an original offer to $47 billion.

Going private would allow Seven & i to continue under current management and remove pressure from shareholders to sell off more of its assets - as well as eliminate the threat from a bidder that it may see as hostile. A management buyout offer (MBO) could also be a tactic to force Couche-Tard to bid more.

Seven & i said in a statement that no decision had been made regarding the MBO, which Bloomberg News said earlier could be worth up to 9 trillion yen ($58 billion), adding that some 6 trillion yen in financing was being discussed.

At that size, the deal, which comes amid surging foreign interest in Japan M&A, would be the largest MBO in history. The biggest so far is the $32.9 billion paid for US hospital company HCA in 2006 when its founder teamed up with private equity heavyweights KKR & Co and Bain Capital.

Seven & i's shares surged in afternoon trade after having been suspended earlier in the day to close up 12%, valuing it at around $42 billion.