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