Investing.com -- The board of Seven & i Holdings (TYO:3382) is set to tell Canada's Alimentation Couche Tard (TSX:ATD) that its initial takeover bid is "inadequate," according to media reports.
Citing sources close to the matter, the reports said a special committee established by the Seven & i, which operates the 7-Eleven convenience store chain, will call Couche-Tard's offer insufficient and highlight worries around the regulatory implications of the deal.
After receiving the input from the committee, Seven & i's board of directors has decided to send a letter to Couche-Tard responding to the offer as early as Friday, the reports said. In it, Seven and i will reportedly argue that Couche-Tard's bid was not in the best interest of stakeholders and does not adequately account for possible hurdles thrown up by US competition law.
The Nikkei business daily, which first reported the news, added that Couche-Tard's proposal included the acquisition of all shares for under $15 per share in cash, translating to a total purchase price of roughly $40 billion. The offer was preliminary and not legally binding, Nikkei also said.
Seven and i said that it does not comment on market rumors as a general policy, the Financial Times reported, citing a statement.
New Couche-Tard chief executive Alex Miller, meanwhile, said in a post earnings call that it was looking forward to engaging in a constructive dialogue with Seven & i, Reuters reported.
In August, Seven and i revealed that it had received an unsolicited, confidential proposal from Couche-Tard. The Canadian group, which oversees Circle-K convenience stores, said that its offer was friendly and non-binding.
At the time, news of the bid -- the largest-ever takeover of a Japanese company -- sent shares in Seven and i spiking by almost 23%.
The offer comes as foreign interest in acquiring Japanese companies has been on the rise due in large part to overhauls in the country's corporate governance laws, as well as a cheaper yen and low interest rates.