CDPQ is one of Couche-Tard’s largest shareholders, with a 3.5% stake worth $2.4 billion
But the terms of any potential deal are still very unclear, he added. “We lack so many numbers.”
Couche-Tard, the Canadian company that owns Circle K and other convenience store and gas station brands, made an approach to Seven & i that valued it at about US$39 billion. The Japanese retailer turned it down, saying the proposal wasn’t good enough to “engage in substantive discussions.”
CDPQ is one of Couche-Tard’s largest shareholders, and the stock is one of its most important holdings — it’s a 3.5 per cent stake in the company, worth $2.4 billion.
“Performance generated there has been tremendous,” Delisle said. The shares have produced a return of more than 27 per cent annualized over the past 30 years, including dividends, and the Caisse has been along for the ride.
Delisle said he has “no idea” how much his fund would chip in to help finance a potential deal for Seven & i, but the firm has supported Couche-Tard with both equity and debt in the past. “We have all the flexibility.” Charles Emond, CDPQ’s chief executive officer, told Nikkei last month the fund “could participate” in a financing.
Couche-Tard repurchased about $1.4 billion of shares from CDPQ in 2023 and 2024 as part of the pension manager’s periodic portfolio rebalancing. “That’s something that makes us even more ready to be there when companies make these such big acquisitions,” Delisle said.
A Couche-Tard takeover of Seven & I would be the largest ever foreign takeover of a Japanese company, according to data compiled by Bloomberg.
Whatever the outcome, Delisle said, “it will give the global market an indication of how Japan really wants to open up and be seen as a source of investment flows or capital equal to what you’d find in Canada, U.S. or Europe.” The Caisse manages $452 billion in pension money and other assets in Quebec.
The Japanese government’s recent openness to foreign direct investment “might have impacted the timing” of Couche-Tard’s approach, according to Raymond James analyst Bobby Griffin. “That might have pushed them to look at it a little bit harder.”
But Couche-Tard and its founder, Executive Chairman Alain Bouchard, have played their cards close on takeover strategy. Bouchard has made a number of approaches to Seven & i for deals over the past two decades. “I would be surprised if this came about very quickly,” Griffin said.
And the firm, which started with a single store in Quebec and progressed to larger and larger acquisitions, is known for looking at multiple M&A opportunities simultaneously — meaning it’s possible that it may emerge with a different deal for another target.
“Couche-Tard, in my experience, is a very methodical and disciplined company,” Griffin said. “They’ve walked away from more deals than they’ve closed.”