Japan’s Seven & i Holdings has rejected Couche-Tard’s initial takeover offer, but the Canadian company says it remains committed to acquiring 7-Eleven’s parent firm.

Meanwhile, Couche-Tard has revealed that it has agreed to pay $1.6-billion as part of its previously announced proposed acquisition of U.S.-based convenience-store chain  GetGo Café + Market from Giant Eagle.

The Seven & i Holdings board announced that it had rejected Montreal-based Couche-Tard’s offer of US$14.86 per share in cash because the offer “grossly undervalues” the Tokyo-based firm. Couche-Tard also failed to explain how it would overcome U.S. regulatory hurdles and sufficiently finance the acquisition valued at more than $30 billion, Seven & i contended.

Stephen Dacus, who chairs a Seven & i special committee formed to review the offer, outlined the reasons for rejecting the proposal in a letter to Alain Bouchard, Couche-Tard’s founder and executive chairman.

The 7-Eleven chain has about 85,800 convenience stores across the globe. Couche-Tard operates approximately 16,800 such retail outlets under different brands, including its own name, in 31 countries.

“We continue to have strong conviction that a combination with 7&i has clear strategic and financial benefits for both companies’ customers, employees, franchisees and shareholders,” said Couche-Tard in a news release. “We believe that, working together, we can successfully reach and complete a mutually agreeable transaction.”

Couche-Tard said it has a successful history and track record of working with regulators in the U.S. and other countries. The company noted that Couche-Tard and Seven 7 i operate in competition with a wide array of food and merchandise providers in several complementary U.S. markets.

Couche-Tard also also said that financing would not be a condition to closing the proposed deal.

“Couche-Tard has a very strong balance sheet and strong investment-grade credit ratings,” said the company. “We are a sophisticated and disciplined user of the capital markets and have well-established relationships with major financial institutions and investors who are willing to support us in this transaction. 

“We have secured a letter from our financial advisor stating that it is highly confident that it is able to arrange the financing for the proposed transaction, subject to customary conditions.”

Dacus, who also chairs the Seven 7 and i board, indicated that the company is still willing to consider a deal with Couche-Tard if a better offer is submitted.

In its latest quarterly earnings report, Couche-Tard said that it has committed to pay the $1.6-billion price as part of the previously announced binding agreement to buy GetGo from Pennsylvania-based Giant Eagle.

GetGo stores are located in Indiana, Maryland, Ohio, Pennsylvania and West Virginia. Couche-Tard intends to finance the deal in cash and through existing credit facilities.

The price was disclosed previously.

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