Japan's Seven & I Explores IPO for North American Convenience Store Division

Seven & I Holdings Co. is actively considering an initial public offering (IPO) for its North American convenience store subsidiary, 7-Eleven Inc., as part of a strategy to generate funds for a significant management buyout proposed by the company's founding family.

The estimated market value of 7-Eleven is projected to be between 4 trillion yen ($26 billion) and 5 trillion yen. The proceeds from the IPO would potentially aid in financing the management buyout, which is estimated to require approximately 9 trillion yen.

The buyout initiative was prompted by a proposal from a family member of the founding group, aimed at countering a takeover bid from Alimentation Couche-Tard Inc., a Canadian company known for operating the Circle K convenience store chain. However, the specifics of how to secure the necessary funding for the buyout remain uncertain.

While the exact stock exchange for the potential listing of 7-Eleven shares has yet to be determined, it is anticipated that Seven & I will retain a stake in the subsidiary should the IPO proceed. As of late December 2023, the convenience store chain operated around 13,000 locations across the United States, predominantly situated near gas stations. In 2021, 7-Eleven expanded its footprint by acquiring Speedway LLC, previously the third-largest convenience store chain in the U.S.

For the fiscal year ending in February, 7-Eleven's revenue is forecasted to reach approximately 8.3 trillion yen, comprising around 70 percent of the total revenue for the Seven & I group.

Previously, 7-Eleven was publicly traded on the New York Stock Exchange until its delisting in 2005, when it became a wholly owned subsidiary of Seven & I Holdings. Recently, the company's Chief Financial Officer, Yoshimichi Maruyama, indicated that the North American operations were undervalued and that the company is exploring various strategies to enhance its market standing.

This potential IPO underscores the ongoing efforts of Seven & I Holdings to navigate the complexities of the retail landscape, particularly in response to competitive pressures and the need for capital to support strategic initiatives.