*

Couche-Tard says Seven & i ( SVNDF ) engaged in 'obfuscation and

delay'

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Seven & i ( SVNDF ) seen as test of Japan's openness to foreign

takeovers

*

Couche-Tard made alternative proposal to Seven & i ( SVNDF )

(Adds Seven & i comment in paragraph 5, shares suspended in

paragraph 7, reaction from shareholders in paragraphs 8-9)

Tokyo, July 17 (Reuters) - Canadian retailer

Alimentation Couche-Tard ( ANCTF ) said on Wednesday it was

withdrawing its $47 billion takeover bid for Seven & i Holdings ( SVNDF )

, citing a lack of constructive engagement by the

Japanese retailer.

The surprise move marks the collapse of what could have been

the largest foreign takeover of a Japanese company as Circle K

operator Couche-Tard sought to create a global convenience store

giant by acquiring the company behind 7-Eleven.

"There has been no sincere or constructive engagement from

7&i that would facilitate the advancement of any proposal,

contrary to comments made publicly by 7&i representatives,"

Couche-Tard said in a letter to its board of directors.

"Rather, you have engaged in a calculated campaign of

obfuscation and delay, to the great detriment of 7&i and its

shareholders," the letter said.

Seven & i ( SVNDF ) said it was disappointed with Couche-Tard's

decision and disagreed with some of the Canadian group's

statements.

Seven & i ( SVNDF ) has been seen as a test case for corporate Japan's

willingness to entertain foreign takeover bids, with the

withdrawal coming after Nippon Steel ( NISTF ) was able to

acquire U.S. Steel in a $14.9 billion transaction.

The Tokyo Stock Exchange suspended trading in Seven & i ( SVNDF )

shares pending verification of media reports about Couche-Tard's

proposal withdrawal.

"We are very disappointed in what appears to be a lack of

willingness to engage from 7&i," said Manoj Jain, co-founder and

co-CIO of Hong Kong-based Maso Capital.

"We believe there is significant value to be realised in a

combination and have expressed this view to the management and

the board."

Couche-Tard raised its offer to $47 billion from $38.5

billion in October last year and in March offered to increase it

further if the Japanese firm cooperated and revealed more

financial information.

It was also working with Seven & i ( SVNDF ) on a store sale plan, in

a bid to ease some regulatory hurdles.

Couche-Tard's approach appeared to be gathering steam after

a $58 billion white-knight bid from Seven & i's ( SVNDF ) founding Ito

family ended after failing to get financing.

Couche-Tard said it had sought to speak to the family but

found them unwilling to engage.

The two companies inked a non-disclosure agreement (NDA) but

"the quantity and substance of the permitted due diligence,

including at two tightly constrained management meetings, have

been negligible," Couche-Tard said in the letter.

Couche-Tard said it believed a full combination of the two

companies would maximise value for shareholders but had also

explored alternatives.

The retailer said it had offered to acquire all of 7&i's

business outside of Japan and 40% of the business in Japan,

where convenience stores are seen as key infrastructure due to

their support role during natural disasters.

"We are not able to effectively pursue this combination

without deeper and genuine further engagement from 7&i

leadership and the special committee," the letter said.

Seven & i ( SVNDF ) proposed selling its international business to

Couche-Tard in return for a stake in the Canadian retailer, the

letter said.

Such a deal "would not deliver the significant premium that

was offered to your shareholders in our transaction proposals,"

the letter said.

Seven & i ( SVNDF ) has been under intense pressure to improve its

lacklustre earnings and demonstrate it can grow independently.

The company has announced a share buyback, is selling off

non-core assets and plans to list its North American convenience

store business.