Apollo Global Management Inc. is considering a major investment in the Ito family’s plan to privatise Seven & i, a top Japanese convenience store operator.
The U.S. private equity firm is reportedly in talks to commit up to $9.5bn as part of the buyout, according to sources.
Under the proposed deal, which could still change, Apollo would join the Ito family and Itochu Corp., the operator of FamilyMart stores in Japan, as key investors. Specifically, the Ito family plans to invest approximately $3.1bn, while Itochu would contribute over $6.3bn. However, discussions with other potential investors about their stakes are still underway.
The current proposal includes combined equity stakes totaling about $25.3bn. However, this doesn’t necessarily mean Apollo will secure majority control, as the terms are still being negotiated. The remaining financing is expected to come from Japan’s top banks: Sumitomo Mitsui Financial Group, Mitsubishi UFJ Financial Group, and Mizuho Financial Group.
Initially, the buyout was valued at $57bn, surpassing the $47.5 takeover bid from Alimentation Couche-Tard. However, this valuation may go down because the Japanese company’s market value remains significantly below these proposals. On Friday, Seven & i’s market valuation stood at around $39.9bn after shares dipped following third-quarter earnings.
Source: Mergers & Acquisitions
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