By Scott Murdoch and Anton Bridge
TOKYO (Reuters) -Shares of Seven & i Holdings surged on Wednesday after Bloomberg News reported Canada’s Alimentation Couche-Tard had raised its takeover offer price by more than a fifth, valuing the Japanese retail giant at $47 billion.
The new proposal at $18.19 per share was more than 20% higher than Couche-Tard’s previous rejected offer for the 7-Eleven owner and was sent last month, Bloomberg said, citing people with knowledge of the matter.
If it were to go ahead, the deal would be the largest ever overseas buyout of a Japanese firm.
Seven & I, which had not publicly disclosed any fresh approach from Couche-Tard, said it was not in a position to comment as it was determining the facts of the report. Circle-K owner Couche-Tard was not immediately available for comment.
Shares of Seven & i surged more than 10% before paring gains and were up 4.7% at 2,335 yen ($15.74) at 0408 GMT.
The reported proposal would put fresh pressure on Seven and i to seriously consider Couche-Tard’s offer, said one Asia-based investor in the Japanese company who declined to be identified because of the sensitivity of the matter.
Seven and i last month said Couche-Tard’s initial bid “grossly undervalues” the company and emphasised its plans to boost corporate value by itself. By doing so, the Japanese company now has to show how it plans to deliver a better return for investors, analysts and business leaders have said.
But Seven & i has so far been unable to materially bolster its share price since Couche-Tard emerged with its bid in August, the Asia-based investor said, adding the Japanese company should take action now to engage with its Canadian suitor.
Analysts and investors are awaiting details of potential value enhancement plans at the group’s second-quarter earnings due on Thursday.
Last week, sources told Reuters that Seven & i was considering selling a stake in its supermarket unit, and Bloomberg reported that it was considering selling part of its Seven Bank holding.
Over the last five years, Seven & i has been under pressure from foreign investors, including ValueAct Capital and Artisan Partners (NYSE:), to divest non-core businesses to focus on its convenience stores.
In August, Artisan called on Seven & i to seriously consider Couche-Tard’s offer and solicit offers for the company’s Japanese subsidiaries “as quickly as possible.”
ValueAct said in April that it supported Seven & i’s plan to divest its superstore business, announced that month, and voted in favour of the board appointees.
ValueAct has not commented since the Canadian firm initially proposed the buyout in August.
($1 = 148.2400 yen)
