08:34 AM EST, 12/04/2024 (MT Newswires) -- The 9 trillion yen ($60 billion) proposed management buyout of Seven & i Holdings Co. is set to include plans for an initial public offering of its North American convenience stores and gasoline stations business to ease financing concerns, people with knowledge of the matter said, Bloomberg is reporting.

As the founding Ito family races to formalize a proposal to counter a rival 7.1 trillion yen offer by Alimentation Couche-Tard Inc. ( ANCTF ) , the listing of the operations is being considered as the optimal way to quickly pay down loans that would be extended by three of Japan's biggest banks in the buyout, the people said.

An IPO would raise more than 1 trillion yen in cash to pay down part of 6 trillion yen in loans by Sumitomo Mitsui Financial Group Inc., Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. and any other institutions, one person said, offering reassurance for the lenders.

Bloomberg said the plans show that the Ito family and Itochu Corp. are seeking to convince Seven & i's board to recommend their management buyout over Couche-Tard's proposal. Any deal would be the biggest buyout on record and reflect a successful unified effort by corporate Japan to keep one of the country's most famous companies from falling into foreign hands, it added.

Seven & i intends to retain a stake in the business after any potential listing, some of the people added.

A representative for Seven & i wasn't immediately able to comment. Attempts to contact the Ito family office didn't elicit a response.

Along with the already announced separation of Seven & i's domestic supermarkets and retail business, Bloomberg noted the company would effectively be split into three entities. The two others would consist of 7-Eleven convenience stores in Japan, and North American 7-Eleven shops as well as Speedway and Sunoco gasoline stations, which generated $70.3 billion in sales during the company's latest fiscal year through February.

Couche-Tard, the Canadian operator of Circle K stores, had sought to buy Speedway in 2020, only to be outbid at the time by Seven & i, which paid $21 billion to acquire the franchise from Marathon Petroleum Corp.

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