The stock fell sharply after Japan's Seven & i Holdings Co. abandoned talks to acquire a stake in Poland's leading convenience store chain. By 2:05 p.m. in Warsaw, shares traded 9.2% weaker at 28.3 zloty. The decline brought the share price down to approximately the same levels observed before news emerged of the Japanese company's interest.
Seven & i, which operates the 7-Eleven brand, announced in a statement that it "was unable to reach a deal that would be in the best interests of the company and its shareholders." Prior to the drop, Zabka shares had risen 22% year-to-date, while Warsaw's WIG20 index had climbed 21%.
The selloff left Zabka with a market value of about 28.4 billion zloty ($7.5 billion).
"The sellers' price expectations were too high," explained Noble Securities analyst Dariusz Nawrot, commenting on why negotiations with the Japanese firm fell through.
Get the market news that matters in a five-minute read with Market Briefs, our free daily newsletter
Zabka's main owners are two private equity firms: one is CVC Capital Partners Plc, the other is Partners Group Holding AG. This turn of events raises the likelihood that a share overhang will once again hinder Zabka's valuation.
Erste Bank Polska analyst Piotr Bogusz said: "Seven & i's withdrawal of interest in acquiring a double-digit stake in Zabka is negative news, especially given the recent significant rise in Zabka's share price in anticipation of a partial removal of the share overhang."
Responding via email to Bloomberg News, Zabka stated that it "does not comment on any reports regarding potential secondary transactions involving its existing shares."
Zabka operates approximately 13,000 physical stores across Poland, with the majority run as franchises. Additionally, the company has had a presence in Romania since 2024.
The Polish convenience store operator went public in October 2024, listing on the Warsaw Stock Exchange. Its rapid expansion and dominant market position have drawn investor interest, but the large block of shares held by private equity backers has created persistent uncertainty. A successful stake sale to Seven & i would have partly alleviated that overhang, potentially supporting the stock price. With the deal now off, the market must contend with the prospect that those shares could eventually be sold, weighing on valuation.
Zabka's business model relies heavily on franchisees, giving it a scalable footprint without the full capital burden of company-owned stores. The private equity backers, CVC and Partners Group, have been looking for an exit route since the IPO, and the failure to reach a deal with Seven & i underscores the difficulty of placing such a large block in a single transaction. Analysts now expect the owners to pursue smaller sales or a secondary offering, which could take months to materialize and leave the stock vulnerable in the meantime.
The stock's reaction suggests that the market had priced in a successful deal, and now faces uncertainty over the timing and method of any future share sale.
Join Market Briefs, our free daily newsletter, for a quick daily rundown of the markets
