By Scott Murdoch and Anton Bridge
TOKYO (Reuters) – Shares in Seven & i Holdings rose on Wednesday after Bloomberg News reported that Canada’s Alimentation Couche-Tard had raised the price of its takeover offer by more than a fifth, valuing the Japanese retail giant at 47 billion dollars.
The new proposal at $18.19 per share was more than 20% higher than Couche-Tard’s previous rejected offer for the 7-Eleven owner and was submitted last month, Bloomberg said, citing people with knowledge of the affair.
If carried out, the deal would be the largest overseas purchase ever made by a Japanese company.
Seven & I, which had not publicly revealed any new approach by Couche-Tard, said it was not in a position to comment because it was determining the facts of the report. Circle-K owner Couche-Tard was not immediately available for comment.
Seven & i shares rose more than 10% before paring gains and were up 4.7% at 2,335 yen ($15.74) by 0408 GMT.
The reported proposal would put new pressure on Seven and me to seriously consider Couche-Tard’s offer, said an Asian-based investor in the Japanese company who did not want to be identified due to the sensitivity of the matter.
Seven and I said last month that Couche-Tard’s initial offer “grossly undervalues” the company and emphasized its plans to increase corporate value on its own. In doing so, the Japanese company now has to show how it plans to deliver a better return to investors, analysts and business leaders said.
But Seven & i has so far failed to materially increase its share price since Couche-Tard submitted its bid in August, the Asia-based investor said, adding that the Japanese company should take steps now to engage with its Canadian suitor. .
Analysts and investors are awaiting details of potential value upgrade plans in the group’s second-quarter results due out on Thursday.
Last week, sources told Reuters that Seven & i was considering selling a stake in its supermarket unit, and Bloomberg reported that it was considering selling part of its stake in Seven Bank.
Over the past five years, Seven&i has been under pressure from foreign investors, including ValueAct Capital and Artisan Partners (NYSE:), to divest non-core businesses and focus on its convenience stores.
In August, Artisan asked Seven & i to seriously consider Couche-Tard’s bid and solicit bids for the company’s Japanese subsidiaries “as quickly as possible.”
ValueAct said in April it supported Seven & i’s plan to sell its hypermarket business, announced that month, and voted in favor of the board’s appointees.
ValueAct has not commented since the Canadian firm initially proposed the purchase in August.
($1 = 148.2400 yen)