Trading house Itochu looks to finance Seven & i management buyout

Trading house Itochu Corp. is considering helping finance the potential buyout of Seven & i Holdings Co. by its management, responding to a request from the founding family of the Japanese retail giant, sources close to the matter said Monday.

Itochu, the parent of convenience store chain operator FamilyMart Co., is apparently in the initial phase of the study, the sources said. The move could complicate the around 7 trillion yen ($45 billion) buyout offer by Canada’s Alimentation Couche-Tard Inc. toward Seven & i.

The Seven & i founding family, which anticipates a management buyout worth 9 trillion yen, has also contacted some banks and investment funds, according to the sources.

Alimentation Couche-Tard, the operator of Circle K convenience stores, has raised its buyout offer from the initial offer of around 6 trillion yen.

With its possible participation, Itochu may expect some synergies between FamilyMart and Seven-Eleven, two of the leading convenience store chains in Japan. But it could also cause antitrust issues because of their dominance in the industry, and Itochu may need to keep its investment ratio low, the sources said.

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