Alimentation Couche-Tard (ACT) confirmed yesterday evening (April 30) that it “has signed a non-disclosure agreement with Seven & i Holdings Co., Ltd. to progress transaction discussions, facilitate due diligence and collaborate on plans to engage with regulators. There can be no assurance that these discussions will result in a transaction,” ACT said in a statement.

Alex Miller, Couche-Tard president and CEO, said, “We appreciate the Special Committee of Seven & i engaging in substantive discussions regarding our proposal and providing access to diligence. We look forward to working collaboratively with Seven & i in the interests of all stakeholders.”

Last month, the companies were reportedly taking steps to divest thousands of stores they collectively own in North America to ease regulatory concerns ahead of a potential merger, and are now faced with an early test of the plan—attracting rival buyers for the stores, reported Reuters.

“The two store operators are likely to struggle to solicit offers from other convenience store chains that might be wary of their own potential antitrust risks arising from such a deal, according to people familiar with the matter and several antitrust experts. Seven & i owns the 7-Eleven convenience store chain, which has more than 12,000 stores in the U.S.,” wrote the outlet.

Most of the interested buyers for the stores are private equity firms, the sources said. This “creates a potential headache for Canada's Couche-Tard and Japan's Seven & i as U.S. antitrust regulators typically frown upon private equity firms as buyers of divested stores, as they are unlikely to be long-term owners.”

The divestiture package proposed by the companies consists of more than 2,000 U.S. stores. However, there is no precedent for private-equity ownership of convenience stores carved out in the aftermath of a big merger, experts said.

“We are putting in front of these private equity funds a network of 2,000 stores with a national presence and very strong footprint in some of the states,” ACT CFO Filipe Da Silva said in an interview to Bloomberg, adding that it would be the fifth- or sixth-largest operator in the US. “The level of interest is really high.”

“It’s a number that shows clearly the commitment of Couche-Tard to take further action if it’s required to make this happen,” Da Silva said.

In March, ACT said it would continue its friendly pursuit of Seven & i. ACT’s top executives, including founder and executive chairman Alain Bouchard, CEO Alex Miller and CFO Filipe Da Silva, visited Tokyo in March to speak with media about its $47 billion bid to buy Seven & i.