Seven-Eleven Japan offers to buy 7-Eleven
THE ASSOCIATED PRESS
NEW YORK -- Seven-Eleven Japan Co. said Thursday it will launch a $1.2 billion cash tender offer for the 27.3 percent stake it doesn't already own in its U.S. affiliate 7-Eleven Inc., in a move to take the world's largest convenience store chain private.
Seven-Eleven Japan - which is Japan's largest convenience store operator with more than 10,000 locations - is 51 percent owned by Japanese retailer and Denny's franchisee Ito-Yokado.
The company, which already holds 72.7 percent of the U.S. 7-Eleven, has offered $32.50 a share in cash for the remaining shares. That represents a 15 percent premium over 7-Eleven's Wednesday closing price of $28.34.
Dallas-based 7-Eleven said in a statement it had appointed a special committee of its board and expects the panel will advise shareholders on or before Sept. 19 on its evaluation of the offer. It operates or franchises approximately 5,800 7-Eleven stores in the United States and Canada.
Seven-Eleven Japan, based in Tokyo, said that in order to better compete in the market, 7-Eleven must boost investment in its merchandising, store renovation, distribution and logistics systems, and information systems. The increase in investment, however, is likely to result in lower growth and profitability for 7-Eleven in the short term, the company said.
Seven-Eleven Japan also said it expects that taking 7-Eleven private will help achieve a better-governed group structure. The company expects to begin the tender offer, which doesn't require 7-Eleven board approval, on or about Sept. 6.
Taking the company private will allow them
to fix it without fear of shareholder revolt.
Then they can bring it public again and rake
in the profits.
Being a public company screws up so many companies.
A public company should be run for the customers first, employees second and shareholders third. If you take care of 1 & 2, then 3 will make out ok.
Unfortunately this has flipped to Shareholders 1st, customers 2nd, and employees 3rd.
That pursuit for the extra 0.01 per share results in losing the experienced employees that make the work happen so orders don't get filled to the customers who go else where. But that's ok, because we made THIS quater for the shareholders. Next quarter is 3 months away. We'll find someone to lay off to make up for the loss.
I've worked in 3 public companies and all 3 have had this scenerio happen. 1 was a private company that ran profitability before they went public and had to appease the shareholders