The Japanese owner of 7-Eleven has been approached with what would be the largest-ever takeover of a Japanese company. The deal speaks to foreign companies seeking to exploit the depressed yen.
In this case, the suitor is Canadian company Couche-Tard, the owner of Circle K convenience stores. The target is Seven & i Holdings Co and it was valued at USD$31 billion before the deal and jumped 23% today.
Indications are that Japanese management will rebuff the offer but it could go hostile in a move to take over the 85,000 retail locations worldwide.
The takeaway her is that corporates are seeing value in yen-denominated assets, though that's somewhat eroded given the recent run in the yen. Even with a premium $40-50 billion still isn't material to the yen but Warren Buffett has also been buying yen-denominated assets in the past two years.
It will take time to turn the ship but we're likely in the final innings of yen weakness.
