TOKYO Japan's Seven & i, owner of the 7-Eleven convenience stores, said it has received a preliminary takeover offer from Canada's Alimentation Couche-Tard, potentially the biggest purchase of a Japanese company by an overseas firm.

News of the offer sent shares of the Tokyo-listed company surging by almost 23%, valuing it at around ¥5.6 trillion . Couche-Tard, which operates Circle-K convenience stores, is valued at roughly US$58 billion .

Seven & i has formed a special committee to review the proposal, it said in a statement on Monday, adding no decision has been made by either that committee or its board of directors. The announcement followed a report on the deal by the Nikkei newspaper.

Alimentation Couche-Tard did not immediately respond to a request for comment outside of its usual working hours.

The talks are "at a very early stage", said a source familiar with the matter who declined to be identified.

A deal for the whole company would be the largest ever buyout of a Japanese firm by an overseas company, LSEG data shows, after the 2018 deal for Toshiba's memory chip business by a consortium led by private equity firm Bain.

For investors, it would also mark the latest milestone in the growing attractiveness of once-shunned Japanese assets.

Changes in corporate governance have helped underscore a sense of renewed relevance for Japan and Japanese companies, said Duncan Clark, chairman and founder of investment advisory firm BDA.

"We've seen this with the number of financial institutions setting up shop or hiring in Japan," Clark said.

Japan was home to one of the world's best-performing stock markets last year and this year the Nikkei index has hit a series of record highs as investors have applauded governance reform.

"This is another example of the attractiveness of the Japanese market for offshore buyers," said Manoj Jain, co-founder and Co-CIO of Hong Kong-based Maso Capital.

"Coupled with private equity interest, we expect this trend to continue driven by underlying asset values, the ability for efficiency gains and the cost of funding," Jain said.

Seven & i has come under pressure from activist investors, who have urged it to sell off underperforming assets and double down on its global convenience store business centred around its flagship 7-Eleven brand.

Founded in 1980, Couche-Tard has grown from a single store in Quebec to a global network of convenience stores and gas stations mostly through acquisitions.

The deal, if agreed, would follow Couche-Tard's US$3.3 billion purchase of some of TotalEnergies' European petrol stations last year and a US$20 billion bid for Europe's largest food retailer Carrefour which was rejected in 2021 by the French government on food security concerns.

In 2020, Seven & i and Couche Tard were rival bidders to take over US gas station chain Speedway, which the Japanese company ended up purchasing for US$21 billion.

  - Reuters