TOKYO (Reuters) -Shares of Japan’s Seven & i Holdings fell more than 7% in morning trade on Tuesday, giving up some of their gains from the previous day, when they surged on news of a takeover proposal from Canada’s Alimentation Couche-Tard.
While the value of the offer has not been disclosed, it would make the 7-Eleven owner the largest-ever Japanese target of a foreign buyout. Couche-Tard owns the Circle-K chain of convenience stores.
Seven & i said it has set up a committee composed only of independent directors to review Couche-Tard’s proposal which includes buying all of the company’s outstanding shares.
The Canadian company confirmed a “friendly proposal” was sent to Seven & i, adding it was focused on reaching a mutually agreeable transaction.
Jefferies said in its research note that Seven & i’s decision to set up an independent committee was positive. But it added that “hurdles remain on the scale of the transaction and antitrust issues”.
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By late morning, Seven & i shares were down 7.3%, after losing more than 12% shortly after the open, and making them the biggest percentage loser on the Nikkei.
On Monday, the news of the deal sent Seven’s shares surging by almost 23% in Tokyo, valuing the retailer at around 5.6 trillion yen ($38 billion).
Couche-Tard, which operates Circle-K convenience stores, is valued at roughly $58 billion.
($1 = 146.2800 yen)
(Reporting by Mariko Katsumura; Editing by David Dolan and Stephen Coates)
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