TOKYO (AP) — The parent company of the Japanese 7-Eleven convenience store chain said Friday that it’s turning down a takeover offer from Alimentation Couche-Tard Inc. of Canada.

In a letter made public, Stephen Dacus, who heads a special committee of outsiders examining the proposed takeover, received last month, said the committee carefully reviewed the offer to acquire all outstanding shares of Seven & i Holdings Co. for $14.86 per share in cash.

That calculates to about $38.6 billion, or 5.5 trillion yen at the current exchange rate.

The Seven & i share price was gradually falling over several months earlier this year, until it surged over the news of the takeover. It traded at 2,133.5 yen ($14.92) on the Tokyo Stock Exchange Friday, down 1.4%.

“After a thorough review and discussion of your proposal, the Seven & i board has unanimously concluded, based on the unanimous recommendation of the special committee, that the proposal is not in the best interest of Seven & i shareholders and other stakeholders,” Dacus wrote.

The offer greatly undervalues the potential of the convenience store business, while not fully addressing U.S. regulatory concerns, he said.

Couche-Tard did not immediately respond. Last month, it confirmed it made a “friendly, non-binding proposal” to Seven & i, “focused on reaching a mutually agreeable transaction that benefits both companies’ customers, employees, franchisees and shareholders.”

It said at that time it wouldn’t make further statements on the discussions “unless or until” an agreement was reached.

What happens next is unclear. Couche-Tard may make another offer.

Some analysts say 7 & i management has not fully leveraged the business’ global potential or delivered enough value to shareholders.

The 7-Eleven franchise includes 86,000 stores in Japan, the U.S. and other Asian nations, while Alimentation Couche-Tard operates about 17,000 stores in 31 countries, including the U.S., Europe, Canada and Japan, including the Circle K stores.

A takeover of such a scale may have problems getting U.S. regulatory approval.

In April, Seven & i announced a restructuring plan to strengthen its U.S. operations and streamline operations, closing some Ito-Yokado supermarkets in Japan.

The omnipresent 7-Eleven convenience stores remain popular in Japan.

Busy “salarymen” and working women flock to the stores for rice balls, take-out meals and daily necessities, while some stores offer places for children to play or for families to dine like a small restaurant.

Last year, Seven & i sold Sogo & Seibu department stores in Japan to Fortress Investment Group, a U.S. fund, for $1.5 billion.

Earlier this year, Seven & i reported an annual profit of 224 billion yen ($1.6 billion), down 20% from the previous year, while annual sales slipped nearly 3%.

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Yuri Kageyama is on X: https://x.com/yurikageyama