Thai conglomerate CP All Plc — which holds the Thai franchise for 7-Eleven — is also weighing plans to take an equity stake in the management buyout of about ¥500 billion, the people said, joining a plan hatched by Seven & i’s founding Ito family and Familymart-operator Itochu Corp. last year.
CP All shares extend their declines Thursday, falling as much as 5%. Any CP All participation in the deal would lead to higher interest expenses, hindering the company’s profit growth, Asia Plus Securities Pcl said in a note this week.
The entities would be some of the final parts of a plan hastily cobbled together to fend off Canadian retailer Alimentation Couche-Tard Inc., whose overtures to Seven & i were made public last August.
Representatives for Citigroup, BofA and CP All did not immediately respond to requests for comment.
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The Ito family and Itochu originally planned a buyout effort valued at ¥9 trillion — trumping the ¥7.5 trillion Couche-Tard takeover bid. This may be lowered as the company’s current valuation hovers well below either figure. Seven & i’s market capitalization was around ¥6.2 trillion as of Thursday.
A successful bid would not just allow one of the country’s biggest retailers to restructure in private, but represent a successful group effort from corporate Japan to keep the storied brand out of foreign hands.
The management buyout proposal would involve about ¥4 trillion in equity stakes with the Ito family contributing around ¥500 billion and Itochu more than ¥1 trillion. The rest would come from bank financing.
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Apollo Global Management Inc. is discussing a commitment of as much as ¥1.5 trillion while KKR & Co. is also considering a stake, Bloomberg News reported earlier.
Sumitomo Mitsui Financial Group Inc., Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. are set to participate in financing.
