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

By Miho Uranaka, Makiko Yamazaki and Ritsuko Shimizu

TOKYO (Reuters) -Non-public fairness companies KKR and Bain Capital every provided greater than $5 billion in first-round bids for the non-core belongings of Japan’s Seven & i Holdings, based on individuals accustomed to the matter.

KKR provided round 800 billion yen ($5.1 billion) for York Holdings, an entity because of be spun out of the Japanese retailer, two of the individuals stated. Rival U.S. agency Bain provided round 1.2 trillion yen, one particular person stated. Native buyout agency Japan Industrial Companions provided round 750 billion yen, one stated.

All three companies have been profitable within the first spherical of bids for the belongings, based on two of the individuals. Reuters spoke to 3 individuals in regards to the first-round bids, all of whom declined to be recognized as a result of the data hasn’t been made public. The dimensions of the bids has not beforehand been reported.

The bids exceed the five hundred billion yen enterprise worth – a measure that features debt – that the 7-Eleven proprietor had anticipated, based on one of many individuals.

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

Seven & i is trying to hive off non-core companies, together with its sprawling grocery store operations, into the York Holdings unit, which is able to home 31 subsidiaries together with the group’s superstores enterprise, child items retailer Akachan Honpo and the corporate that operates Denny’s (NASDAQ:DENN) eating places in Japan.

Individually, the retailer’s founding household is in talks to take Seven & i non-public. That deal, a administration buyout, is designed to fend off a $47 billion takeover supply from Canada’s Alimentation Couche-Tard.

The three non-public fairness companies will now submit legally binding proposals however could alter their gives following due diligence, two of the individuals stated. Unsuccessful bidders from the primary spherical might nonetheless enter negotiations if the three fail to achieve an settlement with Seven & i, two of the individuals stated.

Seven & i is aiming to pick out the profitable bid as early as February, one particular person stated. The choice would then be finalised by the spring, one other particular person stated.

The founding household has additionally approached Bain and KKR about mezzanine funding for the administration buyout, two of the individuals stated.

Seven & i’s market capitalisation stood at 6.2 trillion yen as of Dec. 24. The privatisation, if realised, can be the most important ever of a Japanese agency.

($1 = 157.0300 yen)