Unique-KKR and Bain every supply greater than $5 billion for Seven & i property, sources say

By Miho Uranaka, Makiko Yamazaki and Ritsuko Shimizu

TOKYO (Reuters) – Non-public fairness corporations KKR and Bain Capital have every proposed greater than $5 billion in first-round bids for non-core property of Japan’s Seven & i Holdings, based on individuals conversant in the matter.

KKR has provided round 800 billion yen ($5.1 billion) for York Holdings, an entity anticipated to be spun off from the Japanese retailer, two of the sources stated. Rival U.S. firm Bain provided round 1.2 trillion yen, one individual stated. Native buyout agency Japan Industrial Companions provided round 750 billion yen, one among them stated.

The three firms gained the primary tender for these property, based on two sources. Reuters spoke to a few individuals concerning the first-round bids, all of whom declined to be recognized as a result of the knowledge has not been made public. The dimensions of the bids has not beforehand been communicated.

The provides exceed the five hundred billion yen enterprise worth – a measure that features debt – that the 7-Eleven proprietor hoped for, based on one of many sources.

A Seven & I spokesperson declined to remark, saying the tender course of was not public. KKR, Bain and Japan Industrial Companions additionally declined to remark.

Seven & i is looking for to consolidate its non-core companies, together with its sprawling grocery store operations, into the York Holdings unit, which can home 31 subsidiaries together with the group’s superstores, child items retailer Akachan Honpo and the corporate that operates Denny’s eating places in Japan. .

Individually, the retailer’s founding household is in talks to take Seven & i personal. The deal, a administration buyout, goals to fend off a $47 billion takeover bid from Canadian firm Alimentation Couche-Tard.

The three personal fairness corporations will now submit legally binding proposals however might modify their provides after due diligence, two of the sources stated. Unsuccessful bidders within the first spherical might nonetheless enter negotiations if the three fail to succeed in an settlement with Seven&i, two of the sources stated.

Seven&i goals to pick out the profitable bid as early as February, one individual stated. The choice would then be finalized by the spring, one other individual stated.

The founding household has additionally contacted Bain and KKR about mezzanine financing for the administration buyout, two of the sources stated.

Seven & i’s market capitalization stood at 6.2 trillion yen as of December 24. The privatization, if carried out, can be the most important ever by a Japanese firm.

($1 = 157.0300 yen)

(Reporting by Miho Uranaka, Makiko Yamazaki and Ritsuko Shimizu; writing by Anton Bridge; enhancing by David Dolan and Edmund Klamann)