By Miho Uranaka, Makiko Yamazaki and Ritsuko Shimizu
TOKYO (Reuters) – Private equity firms KKR (KKR) and Bain Capital (BCSF) each made more than $5 billion in first-round bids for the non-core assets of Japan’s Seven & i Holdings, according to people familiar with the matter. case.
KKR offered about 800 billion yen ($5.1 billion) for York Holdings, an entity that will be spun off from the Japanese retailer, two of the people said. Rival U.S. firm Bain offered about 1.2 trillion yen, one person said. Local buyout firm Japan Industrial Partners offered about 750 billion yen, one person said.
All three companies were successful in the first round of bidding for the assets, according to two of the people. Reuters spoke to three people about the first-round bids, all of whom declined to be identified because the information has not been made public. The size of the bids has not previously been reported.
The bids exceed the 500 billion yen enterprise value – a measure that includes debt – that 7-Eleven’s owner had expected, one of the people said.
A spokesperson for Seven & i declined to comment, saying the bidding process was not public. KKR, Bain and Japan Industrial Partners also declined to comment.
Seven & i wants to place non-core businesses, including its extensive supermarket operations, into the York Holdings unit, which will house 31 subsidiaries including the group’s superstores, baby goods retailer Akachan Honpo and the company that operates Denny’s restaurants in Japan. .
In addition, the retailer’s founding family is in talks to take Seven & i private. That deal, a management buyout, is intended to fend off a $47 billion takeover bid from Canada’s Alimentation Couche-Tard.
The three private equity firms will now submit legally binding proposals but could change their offers after 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 aims to select the winning bid as early as February, one person said. The decision would then be final in the spring, another person said.
The founding family has also approached Bain and KKR about mezzanine financing for the management buyout, two of the people said.
Seven & i’s market capitalization was 6.2 trillion yen as of December 24. The privatization, if realized, would be the largest ever of a Japanese company.
($1 = 157.0300 yen)
(Reporting by Miho Uranaka, Makiko Yamazaki and Ritsuko Shimizu; Writing by Anton Bridge; Editing by David Dolan and Edmund Klamann)
