By Scott Murdoch and Anton Bridge
TOKYO (Reuters) -Japan's Seven & i Holdings said on Wednesday it had received a revised takeover bid from Canada's Alimentation Couche-Tard (ACT) (TO:ATD), which was raised to around $47 billion from $38.5 billion, according to two people familiar with the matter.
If it were to go ahead, the deal for the 7-Eleven owner would be the largest-ever overseas buyout of a Japanese firm.
The sources spoke on condition of anonymity because information about the pricing has not been made public.
Bloomberg first reported on the new proposal of $18.19 per share. The new offer is 22% higher than Couche-Tard's previous rejected offer of $14.86 per share.
Seven & i said in a statement that the new proposal was private and non-binding and it planned to keep the negotiations confidential as requested by Couche-Tard.
Couche-Tard, the owner of Circle-K convenience stores, declined to comment.
"The increased offer from ACT is far more compelling than the original proposal. Whilst regulatory hurdles remain, the Seven & i board should engage to see if the deal can be progressed," said Manoj Jain, co-founder and co-CIO of Hong Kong-based Maso Capital.
Shares of Seven & i surged nearly 12% on the report before paring gains to finish the day up 4.7% at 2,335 yen ($15.7), indicating some lack of confidence on the part of investors that a deal could be concluded.
Seven and i last month said that Couche-Tard's initial bid "grossly undervalues" the company and emphasised its plans to boost corporate value on its own. That strategy means it now has to show how it plans to deliver better returns for investors, analysts and business leaders have said.
Seven & i's critics, which have included foreign investors such as ValueAct Capital and Artisan Partners (NYSE:APAM), say it should focus on its core convenience store business, which numbers more than 80,000 7-Eleven stores worldwide. Its other operations include supermarkets, a bank, Denny's (NASDAQ:DENN) restaurants and Tower Records.
Analysts and investors are awaiting details of potential value enhancement plans at the group's second-quarter earnings due on Thursday.
Seven & i may announce the sale of part of its stake in banking arm Seven Bank at the earnings, said Travis Lundy of Quiddity Advisors in a note on the Smartkarma platform, adding that would make it into a "purer play."
Separately, sources have told Reuters that Seven & i is considering selling a stake in its supermarket unit, which would mean accelerating its plan for an initial public offering of the arm, announced in April.
The group is also is considering changing its name to reflect its greater focus on the core convenience store business, TV Tokyo reported on Wednesday.
Last month the retail giant was also classified as "core" to national security in a move seen as raising the regulatory hurdles to a buyout. A finance ministry official has said, however, that this does not change the level of government scrutiny or the review process for any bid to acquire an entire company.
($1 = 148.2400 yen)