Canada's Alimentation Couche-Tard is discussing improving its takeover proposal for Seven & I Holdings with the goal of convincing the Japanese convenience store operator to start engaging in discussions, people with knowledge of the matter said.

Couche-Tard has been weighing how much it would be able to increase the potential offer, the people said, asking not to be identified because the information is private. Shares in Seven & I rose as much as 7.3% in late morning trading in Tokyo on Thursday.

A bid would need to be significantly higher than the initial proposal of $14.86 per share in order to get Seven & I to enter negotiations, according to the people.