(Bloomberg) -- Alimentation Couche-Tard Inc.’s founder and top executives are spending three days in Tokyo this week, seeking to make their case for buying Seven & i Holdings Co. for about ¥7.1 trillion ($47.4 billion) despite being rebuffed by the Japanese retailer.
Couche-Tard is known as a media-shy company that rarely grants interviews but Chairman Alain Bouchard, Chief Executive Officer Alex Miller, Chief Financial Officer Filipe Da Silva and adviser and former CEO Brian Hannasch sat down for an interview during their visit.
Their overtures reflect the seriousness of the takeover attempt, the third time in two decades that Couche-Tard has sought to enter a deal with Seven & i, which is also the global operator of 7-Eleven convenience stores. Any deal would be the biggest-ever takeover of a Japanese company, and is being seen as a key test of whether corporate Japan is ready for big inbound mergers and acquisitions.
The executives, who built a small Canadian retailer into a $51 billion company that includes Circle K, addressed potential concerns by Seven & i employees, antitrust regulations in the US and discussed financing for a potential deal.
Here’s a transcript of that conversation, edited for brevity.
Why are you interested in Seven & i?
Bouchard: “We’re here because we made an offer, a very compelling offer, to Seven & i shareholders, and we want to introduce ourselves because people don’t know us.
“Here in Japan, we were also asked a question — what will happen with the Japanese operation and how will you manage here? And the simple answer is, we don’t move people around. We don’t change the model. We adapt. We take the best practices from the acquisition we acquire, and we end up better.
“We’re also here to establish some relationship with stakeholders, and have been quite successful, other than with the company, so far. We’ve invited them, we’ve tried to organize a meeting, but it didn’t work, but it will eventually. We also want to gain a better understanding of the Japanese culture, but mainly now the Japanese concerns.
“I’ve been to Japan many times. It’s not the first time I have visited 7-Eleven stores and gosh, they’re good. Seven & i have been good at achieving a great number of SKUs [stock keeping units] — the products they have on shelves — at good prices.”
Bouchard said he bought an octopus snack and some sushi at a 7-Eleven store this week.
Asked whether he thought he’d be able to negotiate, Bouchard said: “I think we will. It makes sense. Shareholders are asking for that.”
What’s the vision for Seven & i?
Miller: “We’ve been looking at this for 20 years, and that’s because we have deep respect for Seven & i. They have an iconic brand. You look at the way they execute here in Japan — we like buying leading positions, No. 1 market share positions. We believe that their execution, their offer here in Japan, isn’t just the best in Japan, it’s world class.
“Our stated vision is to become a global leader for mobility and convenience. Putting our two companies together is a huge step in doing that. The 7-Eleven brand is iconic. We would grow the 7-Eleven brand, without question.”
What if you get rebuffed again?
Miller: “Our plan is just to continue to engage, and we will do what it takes. We think the offer that’s on the table is extraordinarily compelling for all stakeholders.”
Will you consider a tender offer?
Hannasch: “Our focus is on engaging with the board and with management in a constructive fashion, with a very compelling offer for everybody.”
Would you be willing to buy just part of Seven & i?
Miller: “We’re looking at Seven & i as a whole.”
How will you address US regulatory concerns?
Bouchard: “We have read, obviously, comments that have been made about a possible roadblock we would have in North America with the Federal Trade Commission in the US, and we have an answer to that. With the 74 acquisitions we’ve made, we’ve faced a lot of discussions with the FTC and we’ve always been able to have a great solution.”
Asked whether there has been preliminary conversations with regulators, Miller said: “Absolutely, yes. Again, we’re very used to this process. We’re very used to engaging with the FTC.”
Bouchard, addressing competition issues, added that as an example, many 7-Elevens in the US don’t sell gasoline, and therefore wouldn’t directly compete with Circle Ks that do.
Have you secured the necessary financing commitments?
Da Silva: “On the financing side, we’ve had a strong history of mergers and acquisitions. We already have very strong support in creating a syndicate. We are very confident that we’ll be able to fund this transaction. We’re very confident we’ll be able to not only finance it, but to keep a high investment credit rating.”
Da Silva added that Couche-Tard already has a Japanese bank in its lending syndicate. “It’s one of the big three, a historical partner.”
Any plans to engage with the founding Ito family?
Bouchard: “That’s the plan, to engage with them. We have a lot of similarities.”
What’s your assessment of Seven & i’s restructuring plan?
Miller: “We believe that our offer provides superior value and certainty versus risk.”
What’s your view of the core designation as a potential hurdle?
Miller: “We don’t see that prohibiting us from ultimately realizing the transaction.”
Would you walk away?
Miller: “We’ve walked away from more deals than we’ve done. We have a very definitive playbook that we deploy and that is being deployed here.
“We believe this creates value for all stakeholders, including our shareholders. We do not destroy shareholder value. If we reached a point that we thought that it was destroying shareholder value, we would walk away. Outside of that, we’re going to engage. Our intent is to do what it takes to ultimately realize this transaction.”
(Updates with detail. A previous version of the story corrected the identity of one speaker.)
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