The race for 7-Eleven is on

One scoop to start: Three top investors are pushing FTSE 100 company Smith & Nephew to consider a break-up of the business, after disappointing results last month reignited concerns about the medical device maker’s strategy.

In today’s newsletter:

The takeover bids for 7-Eleven

Ever since Alimentation Couche-Tard’s formal approach to buy Seven & i Holdings in August, there has been speculation that a “white knight” bidder could emerge on the sidelines.

But the big question was always focused on who had more than $47bn to compete with the Canadian operator’s bid.

Since most Japanese retailers don’t have the scale to do that, some believed one of the trading houses such as Itochu or Mitsubishi — which have exposure to some of 7-Eleven’s competitors — might make a swing at it, most likely in combination with other investors.

(The former owns Family Mart, and the latter has a stake in Lawson. Mitsui & Co. a trading house which does not own any convenience store chain, has also been linked to a possible offer.)

This week another plot twist emerged: the popular convenience store chain received a rival buyout offer from members of the founding family.

The proposal is from Junro Ito, a son of the founder and a vice-president of the group, and Ito Kogyo, a company representing other members of the family.

But maybe more interesting is that the proposed management buyout has emerged just as “preliminary and limited” talks between the Canadian group and Seven & I have begun after months of stonewalling, the FT’s Leo Lewis, David Keohane and Harry Dempsey report.

Relations between bidder and target have been frosty. When the Canadian group’s executives flew to Japan a little while back, no one was willing to meet them. That appears to have now changed.

The founding family’s approach will test whether Couche-Tard has the guts to stay in the race now that a domestic player is at the table.

But that doesn’t seem likely to trouble the Canadian group. The founding family’s offer would be difficult to pull together. It would require unprecedented levels of borrowing from Japan’s largest banks, along with equity investment from a domestic company.

If Couche-Tard and Seven & i’s advisers are finally talking, then from the perspective of those who want to stop the business from falling into foreign hands, there’s all the more need for a white knight bidder.

Klarna gears up for a public listing

Klarna chief executive Sebastian Siemiatkowski is getting things in order for his buy now, pay later (BNPL) pioneer’s next act.

The company on Wednesday said it confidentially submitted a draft registration statement to the US Securities and Exchange Commission, bringing a public offering within the grasp of investors after years of tumult at the Stockholm-based fintech.

Today the company is smaller and leaner than when it had ballooned to a valuation of $46bn in 2021. Investors sharply re-rated the company, and a year later it was worth a meagre $6.7bn.

Siemiatkowski slashed the company’s workforce by a fourth and said cuts could run deeper. He also made waves in software circles by ditching Salesforce and Workday, two workflow managers, in favour of using artificial intelligence to internally develop alternatives.

Klarna’s been slimming down. Last month, it sold most of its UK BNPL portfolio to US activist hedge fund Elliott Management, a deal that freed up as much as £30bn for new lending.

Victor Jacobsson and Niklas Adalberth, Klarna’s two other co-founders, have already left the company, leaving Siemiatkowski as the last one standing.

And the tumult has extended to the boardroom, where two members departed over the past year after a dispute over corporate governance spilled into the public view.

The clean-up has bolstered revenue to $1.3bn in the first half of the year, a quarter higher than 2023.

Regulators are waiting on the sidelines. The UK Labour government last month announced plans to regulate the sector, and the US consumer finance watchdog said BNPL should come under the same calibre of scrutiny as credit cards.

But if US rival Affirm’s 144 per cent gain this year on the stock market is any indication, Klarna still has room to run.

Job moves

• Liberty Media chief executive Greg Maffei is stepping down from the role. Maffei’s departure from the US group, which owns car racing series Formula One, marks a major shift for billionaire John Malone’s corporate empire. Malone will step into the position on an interim basis.

• Blackstone board member Kelly Ayotte is resigning from the position following her election as governor of New Hampshire. She was previously a US senator for the state.

Smart reads

Telco survivors Big Tech deals may have thrown a lifeline to regional telecoms company Lumen and its moribund peers, Lex writes.

Climate fight To have a shot at thwarting global warming, economies and industries need to hit crucial emissions targets by 2030, Bloomberg reports. So far, they’re way off track.

London lunch Peter Hargreaves, the Hargreaves Lansdown co-founder, sat down for Lunch with the FT. He talked about building one of the UK’s most valuable companies, the Neil Woodford scandal — and regrets of buying a private jet.

News round-up

Just Eat Takeaway sells Grubhub at steep loss (FT)

Boohoo urges investors to reject Mike Ashley’s demand to join its board (FT)

Thames Water wins bondholder approval for £3bn emergency loan (FT)

Can ‘mainstream media’ survive the second Donald Trump era? (FT)

Lloyds Bank to stop recognising senior employees’ union membership (FT)

Reeves to force UK council pensions to consolidate into eight ‘megafunds’ (FT)

BioNTech strikes $950mn deal for Chinese drugmaker Biotheus (FT)

P&O Ferries turns to Dubai owner for hundreds of millions in loans (FT)

Siemens Energy posts €1.3bn profit as turbine crisis eases (FT)