7-Eleven owner rejects $38bn buyout offer

The Japanese owner of convenience store chain 7-Eleven has rejected a $38bn (£29.2bn) takeover bid from a Canadian rival.

In a letter addressed to the Circle K owner Alimentation Couche-Tard (ACT), Seven & I Holdings said the Canadian company's offer "grossly" undervalued the company and was fraught with regulatory risk.

The 7-Eleven owner added, however, that it remains open to negotiations and ready to consider a better proposal.

ACT did not immediately respond to a BBC News request for comment.

"The Special Committee believes that your proposal is opportunistically timed and grossly undervalues our standalone path and the additional actionable avenues we see to realize and unlock shareholder value," Seven & I's letter said, referring to a special committee it formed to consider the offer.

ACT's offer comes at a time of significant weakness in the Japanese yen against the US dollar, making Seven & i more affordable to foreign buyers.

"Your proposal does not adequately acknowledge the multiple and significant challenges such a transaction would face from US competition law enforcement agencies," Seven & I's letter added.

7-Eleven is the world's biggest convenience store chain, with 85,000 outlets across 20 countries and territories.

ACT's footprint in the US and Canada would more than double to more than 20,000 sites were a deal to go ahead.