More Time for 7-Eleven

Seven-Eleven Japan extends deadline on tender offer

Published in CSP Daily News

TOKYO -- Seven-Eleven Japan Co. Ltd. said that, at the request of the special committee of the board of directors of 7-Eleven Inc., it has extended its $1.2 billion all-cash tender offer for the outstanding shares of 7-Eleven Inc. that it does not already own until midnight, Eastern Time, on Tuesday, Oct. 18, 2005.

The tender offer was previously scheduled to expire at midnight on Monday, Oct. 3, 2005. The extension will provide the special committee with additional time to complete its review and evaluation of the tender offer.

The extended offer remains subject to the other terms and conditions set forth in the offer to purchase, dated Sept. 6, 2005, filed by Seven-Eleven Japan and its wholly owned subsidiary, IYG Holding Co.

As of Sept. 19, 2005, no shares have been tendered in connection with the offer.

As reported in CSP Daily News yesterday, a committee assembled by Dallas-based 7-Eleven Inc. to discuss a buyout offer is asking shareholders to sit tight until the committee can further study the offer and its likely results.

The special committee is unable to take a position with respect to the tender offer at the present time as it has not yet completed a full and deliberate review and evaluation of the material terms and provisions of the tender offer with the special committee's legal and financial advisors, the committee stated in a filing with the Securities & Exchange Commission (SEC).

The committee expects to complete its review and evaluation of the offer in the near future and inform 7-Eleven's shareholders as to whether it recommends acceptance or rejection of the tender offer. At that time, the committee will include the reasons for the position taken with respect to the tender offer or its inability to take a position.

Seven-Eleven Japan, which is Japan's largest convenience store operator with more than 10,000 locations, is 51% owned by Japanese retailer and Denny's franchisee Ito-Yokado. The company, which already holds 72.7% of the U.S. 7-Eleven, has offered $32.50 a share in cash for the remaining shares. There are about 32 million shares of 7-Eleven Inc. stock.

Seven-Eleven Japan said that in order to better compete in the market, 7-Eleven must boost investment in its merchandising, store renovation, distribution and logistics systems, and information systems. The increase in investment, however, is likely to result in lower growth and profitability for 7-Eleven in the short term, the company said. Seven-Eleven Japan also said it expects that taking 7-Eleven private will help achieve a better-governed group structure.

The tender offer will be conditioned upon, among other things, the sale of a majority of the shares not held by Seven-Eleven Japan and its affiliates, and the ownership by Seven-Eleven Japan of at least 90% of the shares on a fully diluted basis. The tender offer is not conditioned upon Seven-Eleven Japan obtaining any financing.