Japanese retail behemoth Seven & i Holdings has been designated as "core" to national security, according to an updated list released by the finance ministry on Friday.

This classification follows the company's rejection of a £30.7 billion buyout offer from Canadian firm Alimentation Couche-Tard last week.

The timing of this classification has sparked speculation about whether it might be a defensive strategy by the owner of 7-Eleven convenience stores. However, a ministry official clarified that the new status does not necessarily create additional obstacles for a potential Couche-Tard takeover.

"The classification does not alter the level of government scrutiny or the review process for any bid to acquire an entire company," the official stated.

Seven & i was quick to dismiss any connection between its new classification and Couche-Tard's buyout proposal. A company spokesperson said, "Our classification is unrelated to the recent takeover offer."

The ministry's classification list, which is updated almost annually based on surveys of all listed companies, saw 88 new additions this year. While convenience stores, Seven & i's primary business, would not typically warrant a national security review, the group's diverse portfolio includes financial and security services for commercial facilities.

Last week, Seven & i rejected Couche-Tard's offer, stating it was not in the best interests of its shareholders and could face antitrust challenges in the United States. The combined entity would become the largest convenience store operator in the US by a significant margin.

Sources close to the matter have revealed that US antitrust regulators have indicated they may investigate a potential deal between Seven & i and Couche-Tard. Additionally, Seven & i has reportedly engaged Nomura to advise the company's special committee on the potential takeover.

Despite the rejection, Couche-Tard appears undeterred. According to a Bloomberg report, the Canadian company is considering raising its offer price.

The classification of companies as "core" to national security typically requires foreign entities seeking to acquire a stake of 1 per cent or more to file for a national security review with the Japanese government. However, in cases of full buyouts, a review is mandatory for companies deemed significant to Japan's economy or security, regardless of their core or non-core status.

In a letter to Couche-Tard, Stephen Dacus, an outside director and chair of Seven & i's independent committee, wrote, "We have found that Couche-Tard's offer grossly undervalues our stand-alone path and the additional actionable avenues we see to realise and unlock shareholder value."

The rejection of Couche-Tard's bid, which valued Seven & i shares at $14.86 each, may intensify pressure on the Japanese company to boost its market value. Some shareholders have publicly urged Seven & i to seriously evaluate the Canadian group's offer. The company now faces the challenge of convincing investors that it can enhance corporate value independently, stating that it is "single-mindedly focused on delivering value for Seven & i shareholders and other stakeholders."

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