Finance

7-Eleven’s parent company rejects takeover proposal, says offer ‘grossly undervalues’ company

Published

1 month ago

September 6, 2024

Customers exit a 7-Eleven convenience store, operated by Seven & i Holdings Co., in Kobe, Japan, on Friday, Aug. 30, 2024. Alimentation Couche-Tard Inc. had made a preliminary non-binding proposal to buy Seven & i, which operates more than 85,000 stores across the globe, and the deal would be the biggest-ever foreign takeover of a Japanese company. Photographer: Soichiro Koriyama/Bloomberg via Getty Images

Bloomberg | Bloomberg | Getty Images

Seven & i Holdings has rejected the takeover offer from Canadian convenience store operator Alimentation Couche-Tard, saying the offer “is not in the best interest” of its shareholders and stakeholders.

In a filing with the Tokyo Stock Exchange, the owner of 7-Eleven revealed that Couche-Tard had offered to acquire all outstanding shares of Seven & i for $14.86 per share.

Stephen Dacus, chairman of the special committee that Seven & i had formed to evaluate Couche-Tard’s proposal, called the proposal “opportunistically timed and grossly undervalues our standalone path and the additional actionable avenues we see to realize and unlock shareholder value in the near- to medium-term.”

In April, Seven & i announced a restructuring plan for the company, aimed at growing 7-Eleven’s presence globally as well as divesting its underperforming supermarket business.

Dacus wrote that even if Couche-Tard increases its offer “very significantly,” the proposal does not consider the “multiple and significant challenges” the takeover would face from U.S. anticompetition agencies.

“Beyond your simple assertion that you do not believe that a combination would unfairly impact the competitive landscape and that you would ‘consider’ potential divestitures, you have provided no indication at all of your views as to the level of divestitures that would be required or how they would be effected,” he wrote in a letter that appeared to be addressed to ACT Chair Alain Bouchard that was published in the Tokyo Stock Exchange filing.

He also pointed out that the Couche-Tard proposal did not indicate any timeline for clearing regulatory hurdles or whether the company was “prepared to take all necessary action to obtain regulatory clearance, including by litigating with the government.”

Dacus said Seven & i is open to sincerely considering proposals that are in the best interests of the company’s stakeholders and shareholders, but warned it will also resist one that “deprives our shareholders of the company’s intrinsic value or that fails to specifically address very real regulatory concerns.”

Shareholder speaks out

Speaking to CNBC’s “Squawk Box Asia” shortly before the response was filed on Friday, Ben Herrick, associate portfolio manager at Artisan Partners, said the Couche-Tard offer “highlights the fact that this management team and the board have not done all of the things in their power to increase the corporate value of this organization.”

How 7-Eleven became the biggest convenience store in the world

Artisan Partners is a U.S. fund that holds a stake of just over 1% in Seven & i. In August, the firm had reportedly urged Seven & i Holdings to “seriously consider” the buyout offer and solicit offers for the company’s Japanese subsidiaries “as quickly as possible.”

Herrick explained Artisan asked Seven & i to consider the offer because the fund feels that capital allocation overseas has been overlooked.

He said Seven & i’s Japanese convenience store business does not need much change, but said there’s a “huge opportunity” in international licensees operating outside the United States.

“You have more than 50,000 stores, or about 50,000 stores that are generating about $100 million or just over $100 million of operating profit for for the company. So I think there’s a big mismatch there,” he said.

Herrick also thinks that Seven & i has been slow to adopt changes due to insufficient oversight and accounting.

“We really need the company to enact its plan at a faster pace here. So [Seven and i President Ryuichi] Isaka came out with his 100 day plan in 2016 to reform [general merchandise store] Ito-Yokado. And we’re approaching day 3,000 here. So I don’t think that speed has been a big part of this culture, and that needs to change,” he pointed out.

On Monday, Richard Kaye, portfolio manager at independent asset management group Comgest, disagreed in an interview on CNBC’s “Squawk Box Asia,” saying: “I don’t think there’s a case for a radical reform to be to be done by a foreign acquirer.”

The company is doing a “phenomenal job” in terms of logistics and product innovation and “I think it’s very hard to assume that that could be done an awful lot better,” he added.

Finance

Biden administration forgives $4.5 million in student debt for 60,000 borrowers

Published

18 hours ago

October 18, 2024

Business Finance News

Borrowers who serve in the public service sector and government are eligible for this forgiveness. (iStock )

Another 60,000 student loan borrowers will receive student loan relief in the coming weeks. The Biden Administration announced $4.5 billion in relief for public service workers such as nurses, teachers and social workers.

The relief comes as a fix to the original Public Service Loan Forgiveness (PSLF) program. The program was initially signed into law by George W. Bush in 2007 to give non-profit and government employees loan forgiveness after 10 years in the workforce.

“Before President Biden and Vice President Harris entered the White House, the Public Service Loan Forgiveness program was so riddled by dysfunction that just 7,000 Americans ever qualified,” U.S. Secretary of Education Miguel Cardona said in the Education Department’s press release.

The new relief intends to pay down the loans of borrowers who were originally denied acceptance or who have still not received relief after making the 120 required monthly payments.

“Today’s announcement comes on top of the significant progress we’ve made for students and borrowers over the past three years,” President Joe Biden said in a statement.

“That includes approving debt cancelation for nearly 5 million Americans across all our various debt relief actions; providing the largest increases to the maximum Pell Grant award in over a decade; fixing Income-Driven Repayment so borrowers get the relief they earned; and holding colleges accountable for taking advantage of students and families,” Biden said.

If you have private student loans, federal relief doesn’t apply to you, unfortunately. If you’re looking to lower monthly payments and ease the burden of student loan debt, consider refinancing. See what your interest rate could be via the online marketplace Credible.

IS COLLEGE DEBT WORTH IT?

Resources available for students affected by the recent hurricanes

Hurricanes Helene and Milton have wreaked havoc on many communities in the south, causing serious physical damage and severely disrupting educational services. In response, the U.S. Department of Education released resources to help students and institutions of higher education recover.

“I have directed our team at the Department of Education to leverage every possible resource available to meet the needs of impacted students, families and school communities,” Cardona said.

The new resources include support for recovery needs like mental health care for students and educators, technical assistance and flexible financial aid policies at affected universities. Many students are also automatically being enrolled in natural disaster forbearance, so they don’t have to worry about their loans while recovering from the hurricanes.

Most of these resources will be concentrated on Georgia, which has seen a substantial amount of damage. The Readiness and Emergency Management for Schools Technical Assistance Center is a specific program Georgians have access to. It helps education agencies manage their safety, security and emergency management programs.

The Early Childhood Technical Assistance Center is another option that offers resources and links from organizations that help families and children, including those with disabilities, cope with disasters.

If you don’t have federal student loans that qualify for assistance, refinancing could cut your monthly payment. You can use Credible to compare student loan refinancing rates from multiple private lenders all at once without affecting your credit score.

STUDENT LOAN DEBT HAS INCREASED BY 430% SINCE 2003 – HERE’S HOW TO LOWER YOUR DEBT

$70 million in federal funding going to schools for additional mental health services

Along with aid to student loan borrowers and students affected by natural disasters, the Biden administration is also directing federal funding towards mental health services in K-12 schools. The administration announced a $70 million investment that will expand students’ access to mental health support.

“We know that students are more likely to access mental health support if it’s offered in schools, and our educators and school communities are on the front lines when a student is struggling,” Cardona said in the announcement.

“The need for mental health support in our schools remains high,” Cardona said. “Today’s announcement of an additional $70 million will allow more institutions and schools to train and hire mental health professionals – especially in underserved communities – ensuring that every student has access to the care they need to thrive.”

The new funding, combined with the Bipartisan Safer Communities Act (BSCA) investments, will go to 333 grantees across 48 states. It will help communities train and hire 4,000 more mental health professionals across the country.

To see what you’d pay on a private student loan, you can visit Credible today to view a rates table that allows you to compare fixed and variable rates from multiple lenders.

LESS THAN A THIRD OF AMERICANS APPROVE OF HOW BIDEN HAS HANDLED STUDENT LOAN DEBT

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.