(Reuters) -Canadian retailer Alimentation Couche-Tard said on Wednesday it was withdrawing its $47 billion takeover bid for Seven & i Holdings, citing a lack of constructive engagement by the Japanese retailer.
The surprise move marks the end of a year-long attempt by Circle K operator Couche-Tard to create a global convenience store giant by acquiring the company behind 7-Eleven.
“There has been no sincere or constructive engagement from 7&i that would facilitate the advancement of any proposal, contrary to comments made publicly by 7&i representatives,” Couche-Tard said in a letter to its board of directors.
“Rather, you have engaged in a calculated campaign of obfuscation and delay, to the great detriment of 7&i and its shareholders,” the letter said.
Seven & i has been seen as a test case for corporate Japan’s willingness to entertain foreign takeover bids, with the withdrawal coming after Nippon Steel was able to acquire U.S. Steel in a $14.9 billion transaction.
Seven & i said it was not immediately able to comment.
Couche-Tard raised its offer to $47 billion from $38.5 billion in October last year and in March offered to increase it further if the Japanese firm cooperated and revealed more financial information.
It was also working with Seven & i on a store sale plan, in a bid to ease some regulatory hurdles.
Couche-Tard’s attempts at cementing the acquisition had gathered steam after a rival $58 billion white-knight bid from Seven & i Holdings’ founding family ended after failing to get financing.
The companies had inked a non-disclosure agreement (NDA) earlier this year, but “the quantity and substance of the permitted due diligence, including at two tightly constrained management meetings, have been negligible,” Couche-Tard said in the letter.
“At this point, we had no visibility into whether or when we might receive any further information,” Couche-Tard’s letter said.
Couche-Tard said it had offered to acquire all of 7&i’s business outside of Japan and just 40% of the business in Japan, where convenience stores are seen as key infrastructure due to their support role during natural disasters.
“We are not able to effectively pursue this combination without deeper and genuine further engagement from 7&i leadership and the special committee,” the letter said.
Seven & i proposed selling its international business to Couche-Tard in return for a stake in the Canadian retailer, the letter said.
Such a deal “would not deliver the significant premium that was offered to your shareholders in our transaction proposals,” the letter said.
Seven & i has been under intense pressure to improve its lacklustre earnings and demonstrate it can grow independently.
The company has announced a share buyback, is selling off non-core assets and plans to list its North American convenience store business.
(Reporting by Savyata Mishra in Bengaluru; Editing by Shailesh Kuber and Sonali Paul)
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