The parent company of 7-Eleven rejects takeover proposal, stating that the offer 'undervalues' the company.

• The company stated that the proposal was "opportunistically timed and undervalues our standalone path and the additional actionable avenues we see to realize and unlock shareholder value in the near- to medium-term."
• Even if Couche-Tard increases its offer "very significantly," Seven & i said the proposal does not take into account the "multiple and significant challenges" the takeover would face from the U.S. anticompetition agency.

The takeover offer from Canadian convenience store operator has been rejected by the company, as it is not in the best interest of its shareholders and stakeholders.

The owner of 7-Eleven disclosed in a filing with the Tokyo Stock Exchange that Couche-Tard had made an offer to purchase all outstanding shares of Seven & i for $14.86 per share.

Stephen Dacus, chairman of the committee formed to evaluate Couche-Tard's proposal, stated that the proposal was opportunistically timed and undervalued the standalone path and the additional actionable avenues that could be taken to unlock shareholder value in the near- to medium-term.

In April, Seven & i unveiled a restructuring plan to expand 7-Eleven's global presence while also selling off its underperforming supermarket business.

Even if Couche-Tard increases its offer significantly, the proposal does not address the "multiple and significant challenges" the takeover would face from U.S. anticompetition agencies, as Dacus wrote.

In the letter published in the Tokyo Stock Exchange filing, you wrote that you do not believe a combination would unfairly impact the competitive landscape and that you would consider potential divestitures, but you have not provided any indication of the level of divestitures required or how they would be effected.

He highlighted that the Couche-Tard proposal did not specify a timeline for overcoming regulatory obstacles or if the company was ready to take all necessary legal action to obtain regulatory approval.

Dacus stated that Seven & i is willing to seriously consider proposals that align with the interests of the company's stakeholders and shareholders, but cautioned that any proposal that diminishes the company's inherent worth or does not adequately address legitimate regulatory concerns will be resisted.

Shareholder speaks out

Ben Herrick, associate portfolio manager at Artisan Partners, stated on CNBC's "Squawk Box Asia" that the Couche-Tard offer highlights the inadequacy of the management team and board in increasing the corporate value of the organization.

Seven & i Holdings is a Japanese company that has a stake of just over 1% held by Artisan Partners, a U.S. fund. In August, the firm had reportedly urged the company to "seriously consider" the buyout offer and solicit offers for its Japanese subsidiaries "as quickly as possible."

Artisan requested that Herrick consider the offer because the fund believes that capital allocation overseas has been neglected.

He stated that Seven & i's Japanese convenience store business requires minimal changes, but there is a "huge opportunity" for international licensees to operate outside the United States.

The company has more than 50,000 stores generating about $100 million of operating profit, but there is a significant discrepancy between the number of stores and the profit generated.

Herrick believes that Seven & i has been slow to adopt changes due to insufficient oversight and accounting.

"We need the company to implement its plan at a faster pace. President Isaka introduced his 100-day plan in 2016 to reform Ito-Yokado, and we are now on day 3,000. However, I believe that speed has not been a significant part of this culture, and it needs to change," he emphasized.

Richard Kaye, portfolio manager at independent asset management group Comgest, stated in an interview on CNBC's "Squawk Box Asia" that he does not believe a foreign acquirer should implement a radical reform.

The company is excelling in logistics and product innovation, making it challenging to believe that it could be improved significantly, according to him.