Flyer for $220m-a-year 7-Eleven out, Japanese suitor bankers up

Other details relayed to potential suitors is sales and foot traffic information – between 50 per cent and 100 per cent higher than peers and the number of customers served every second: eight. Some 9000 people live within a one-kilometre radius of every store, the document reports. More than 60 per cent of customer visits do not include a fuel sale, it adds.

Working off OTR Group’s 11-times sale multiple (pre-synergies) to Viva Energy last year would suggest a value for 7-Eleven well north of $2 billion. Given its size, most private equity firms will have a look at 7-Eleven. Buyout firms spend more time explaining to limited partners why they didn’t look at an asset, rather than why they did.

Getting 7-Eleven – a major tobacco retailer – past various ESG screens will be an issue. It is, however, a declining revenue stream for the business, and each PE firm will have different ESG thresholds whether it be for an individual fund or the firm as a whole.

Seven & i doesn’t have preemptive rights, but the new owner will need its consent to continue using the 7-Eleven brand. Other global convenience store giants, including Canadian retailer Couche-Tard – the operator of Circle K – are known to be interested. A key talking point is whether the likes of Couche Tard could face resistance from Seven & i, on the basis that it is a competitor.

Seven & i has had its own issues of late. Last week, it managed to see off North American activist funds that had sought to dump its leadership after shareholders voted down a proposal from ValueAct Capital, a major investor in the company. ValueAct was calling for Seven & i’s 7-Eleven operations to be spun out of the business entirely.