Japanese trading giant Itochu has withdrawn from participating in the founding family’s privatization bid for Seven & i Holdings, severely complicating efforts to raise the ¥8 trillion ($53.5 billion) needed to take the retail conglomerate private.
The founding family, which controls about 8% of Seven & i through its asset management firm Ito-Kogyo, had been counting on Itochu to contribute ¥1 trillion toward the ¥4 trillion expected from corporate investors and investment funds. The remaining ¥4 trillion was to come from domestic and foreign financial institutions.
Itochu determined the massive investment wouldn’t create sufficient synergies with its existing food businesses to justify the expenditure, according to a source familiar with the matter.
The setback comes as Seven & i’s special committee of independent directors evaluates three strategic options: the founding family’s privatization plan, accepting Canadian Alimentation Couche-Tard’s takeover offer, or continuing as an independent public company.
Couche-Tard’s offer of $18.19 per share (approximately ¥2,700) exceeds Seven & i’s current trading price of around ¥2,400, making it potentially attractive to shareholders. However, the committee has expressed concerns about U.S. antitrust hurdles, as both companies hold significant market share in the American convenience store sector.
The Japanese government has also raised economic security concerns about a foreign takeover of Seven & i, particularly regarding potential leaks of personal data collected through the company’s convenience store services.
The founding family’s privatization plan, initially targeting completion by May when the company holds its annual shareholders’ meeting, now appears increasingly difficult to achieve following Itochu’s withdrawal.
