Alimentation Couche-Tard could issue debt and tap its pension shareholders for funding in order to finance a proposed deal to buy out 7-Eleven owner Seven & I Holdings, people familiar with the Canadian retailer’s thinking said.
A leveraged acquisition of the Japanese company would be feasible because of its strong cash flow, which will help to pay down debt quickly, said the people, who asked not to be identified because the information isn’t public. Couche-Tard is interested in the entirety of Seven & I, they added.
The companies disclosed last week that Couche-Tard had made a preliminary non-binding proposal to buy Seven & I, which operates more than 85,000 stores across the globe. Any deal to acquire the retailer, which has a market value of about ¥5.3 trillion ($36.8 billion), would be the biggest-ever foreign takeover of a Japanese company. Couche-Tard, which operates 16,700 stores, is worth about $55.5 billion.
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