Seven & i holdings [TYO:3382] could be about to put its 7 Eleven business in the US up for an IPO. This follows an effort by Canada’s Alimentation Couche-Tard TSX:ATD to acquire Seven & i in a hostile takeover move. Seven & i, currently listed in Tokyo, is also facing a possible JPY 9bn management buy out in a bid to see off the predatory move from Canada.
Seven & i had been planning to list its Japanese superstores business but could be looking at the US IPO as a move to raise cash and keep the Japanese banks happy. A new listing in the US would likely come with a discounted valuation as an additional barrier to the Couche-Tard bid.
Based on Couche-Tard’s bid, the US 7-Eleven business is likely worth around $38bn, according to Reuters. Seven & i would need to sell about 17% of its business to fund the proposed leveraged buy-out which it needs to protect core assets in Asia.
The other big issue is that publicity around the deal will likely cause more possible buyers to take a closer look at Seven & i holdings, which is likely something its controlling owner, Japan’s Ito family, is keen to avoid. Timing and final pricing are still to be revealed.
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Biotech IPO landscape forecast to improve in 2025
More biotech IPOs are anticipated this year, according to analysis from Evaluate Pharma. The biotech sector is still in recovery mode, having fallen off a cliff after the pandemic. It is also facing headwinds, including from a new US administration which could have an impact on approvals. There remains a big concern that key Trump administration appointments in areas like Health and Human Services will not be in place before the summer.
Evaluate did say that the equity markets are opening up to new issues and that this trend is expected to continue in 2025. Leftfield choices to run biotech and pharma regulation is undermining investor sentiment, along with Trump’s threats to impose new tariffs which will feed through into higher inflation and interest rates in the US. This will not be good for cash hungry sectors like biotech.
There is also expected to be a pick up in M&A within the sector which could attract non-specialist investors. Evaluate says there is “a huge amount of pent up demand sitting in the private world…the equity markets can provide the sort of growth capital beyond the means of the venture world, a world that has had to support many portfolio companies for much longer than desirable.”
$250 million in shares issued for Chicago casino
Bally’s has launched a $250m IPO for its planned casino in Chicago, the city’s first. The IPO is being made available for women and minorities. The new complex, which is sited in River West, is expected to open in September 2026. The overall project has been valued at $1.7bn.
Work at the 30 acre site is currently halted following a demolition mishap that saw debris being spilled into the Chicago River. The new casino is on the site of the old Chicago Tribune printing plant.
The $250m IPO includes four classes of stock which range from $250 up to $25,000 for a share. Qualified minorities can invest until 31 January. The IPO will close on 7 February. The issue is being managed by Loop Capital Markets in Chicago. The shares are limited to investors who meet the city of Chicago’s socially disadvantaged designations. Any investor groups which would like to participate must also be controlled by women or minorities.
The shares will bring with them restrictions on future sale and cash distributions and are to be deferred for at least three years after the casino opens. This will, of course, depend on the casino becoming profitable, but given its location and scale, we feel that looks achievable.
