KKR and Bain Capital, the private equity firms each offered more than $5B in first-round bids for the non-core assets of Japan’s Seven & i Holdings, as per report. As per report, KKR offered around 800B yen ($5.1 billion) for York Holdings, an entity due to be spun out of the Japanese retailer, two of the people said. The other bid of 1.2 trillion yen was placed by rival U.S. firm Bain. There was a local buyout offer from a firm called Japan Industrial Partners around 750 billion yen.
The first round was successful for all the three firms for bids for the assets. The bids exceed the 500-billion-yen enterprise value. This includes debt that the 7-Eleven owner had expected, according to one of the people.
KKR and Bain bids
There were no comments from Seven & i declined on the bids as it was not yet public. KKR, Bain and Japan Industrial Partners also declined to comment on the bid.
Seven & i’s assets
Seven & i is looking to hive off non-core businesses, including its sprawling supermarket operations, into the York Holdings unit, which will house 31 subsidiaries including the group’s superstores business, baby goods store Akachan Honpo and the company that operates Denny’s restaurants in Japan.
Seven & i’s privatization
There has also been talk of the retailer’s founding family in talks to take Seven & i private. The desire for Seven & i’s privatization, is designed to fend off a $47 billion takeover offer from Canada’s Alimentation Couche-Tard.
The market capitalization for Seven & i’s stood at 6.2 trillion yen as of December 24. The privatization of Seven & i, if realized, would be the largest ever of a Japanese firm.
Seven & i’s assets sale offer
The three private equity firms will now submit legally binding proposals but may alter their offers following due diligence, two of the people said. Unsuccessful bidders from the first round could still enter negotiations if the three fail to reach an agreement with Seven & i, two of the people said.
Seven & i is aiming to select the winning bid as early as February, one person said. The decision would then be finalized by the spring, another person said.
The founding family of Seven & i has also approached Bain and KKR about mezzanine funding for the management buyout, two of the people said.
