Photo/Illutration The Seven & i Holdings Co. headquarters in Tokyo's Chiyoda Ward (Asahi Shimbun file photo)

Japanese retail conglomerate Seven & i Holdings Co. rejected an acquisition bid from major Canadian convenience store operator Alimentation Couche-Tard Inc., saying the offer was “grossly” inadequate.

Seven & i said it sent a letter dated Sept. 6 to inform Couche-Tard that the company’s board had “unanimously concluded the proposal is not in the best interest of its shareholders and other stakeholders.”

The letter said Seven & i would be “open to engaging in sincere discussions” if Couche-Tard revises the proposal.

But Seven & i expressed its view that there are high hurdles to overcome, including the low acquisition price and possible violations of anti-monopoly laws overseas.

According to Seven & i, Couche-Tard offered to buy all outstanding shares of the Japanese company at $14.86 per share. Based on the current exchange rate of 143 yen to the U.S. dollar, the acquisition price would be around 5.6 trillion yen.

The letter said the proposal “grossly undervalues” the company’s potential shareholder value in the short- and medium-term.

Seven & i operates more than 21,000 7-Eleven convenience stores in Japan and over 80,000 stores worldwide. It also owns supermarket chain Ito-Yokado Co. and baby product retailer Akachan Honpo Co.

The Japanese retailing giant also noted that if it accepted a more attractive offer by Couche-Tard, the Canadian company’s combined share in the U.S. convenience store market could rise to an unacceptable level.

The letter said Couche-Tard’s “proposal does not adequately acknowledge the multiple and significant challenges such a transaction would face from U.S. competition law enforcement agencies in the current regulatory environment.”

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