TOKYO, Feb 27 (Reuters) - Japan's Seven & I Holdings ( SVNDF )

said on Thursday the retailer's founding Ito family

could not secure the financing required for a $58 billion

management buyout, and it would consider a rival offer from

Canada's Alimentation Couche-Tard ( ANCTF ).

"There is no actionable proposal from Mr. Junro Ito and

Ito-Kogyo for 7&i to consider at this time," the company said in

a statement.

"7&i remains committed to exploring all opportunities to

unlock value for shareholders and continues to assess a full

range of strategic alternatives, including the proposal from

Alimentation Couche-Tard ( ANCTF )."

Itochu ( ITOCF ) said in a statement it had ended its

consideration of participating in the Seven & I ( SVNDF ) founding

family's buyout proposal.

The failure of the management buyout heightens the

likelihood of Couche-Tard pulling off a mammoth acquisition of

one of Japan's best-known and most beloved retailers, which owns

7-Eleven convenience stores.

Seven & i's ( SVNDF ) shares sank 12%, while Itochu ( ITOCF ) shares were rallied

more than 6% in early trading in Tokyo on Thursday after the

retailer confirmed a report in the Yomiuri newspaper that it was

set to abandon the management buyout.

Circle K convenience store owner Couche-Tard's $47 billion

bid for Seven & I ( SVNDF ) is one of the most prominent examples of the

surge in international interest in Japanese assets in recent

years. An exit from deflation and deepening corporate governance

reforms have drawn more investors to a market once seen as all

but untouchable for foreigners.

A spokesperson for the Canadian retailer said on Wednesday

that Couche-Tard remained committed to reaching a mutually

agreeable transaction with Seven & I ( SVNDF ).

After receiving a takeover bid from Couche-Tard last year,

Seven & i's ( SVNDF ) founding family had begun talks to take the

convenience store owner private in what would have been the

largest management buyout in history if successful.

Couche-Tard had offered $38.5 billion, but raised it to $47

billion after Seven & I ( SVNDF ) rejected the initial bid.