The Japanese owner of convenience store chain 7-Eleven has rejected a $38bn (£29.2bn) takeover bid from Canadian rival Alimentation Couche-Tard.
In a letter addressed to the prospective buyer, Seven & i Holdings said the Circle K owner's offer "grossly" undervalued the company and was fraught with regulatory risk.
The 7-Eleven owner added, however, that it remains open to negotiations and ready to consider a better proposal.
If successful the buyout would create a 100,000-strong global convenience store giant.
Stephen Dacus, the chair of the Seven & i board considering the deal, said in a letter that the proposal was "opportunistically timed".
The proposal, Mr Dacus added, "grossly undervalues" the Japanese retail giant and its potential to generate more value for shareholders.
Alimentation Couche-Tard (ACT), which is based in Quebec, runs around 17,000 shops across North America, Europe and Asia under the Circle K and Couche-Tard brands.
The initial offer by the prospective buyer valued Seven & i at $14.86 per share. That's more than 20% above its share price before the offer was announced.
The offer came when the Japanese yen is significantly weaker than the US dollar, making Seven & i more affordable to foreign buyers.
In rejecting the offer, Seven & i also flagged up "multiple and significant challenges" a deal would face from US competition regulators.
7-Eleven is the world's biggest convenience store chain, with 85,000 outlets across 20 countries and territories.
ACT's footprint in the US and Canada would more than double to about 20,000 sites were a deal to go ahead.
A Japanese company of this size has never been bought by a foreign firm.
Historically, companies from Japan were more likely to buy overseas businesses.
"Japan needs to protect its national assets... and Seven & i is a major asset, so expect this to be a long drawn-out process of negotiation," said the head of strategy at Astris Advisory Japan, Neil Newman.
"If it succeeds... then it would show that Japan is open for business and welcomes foreign investment."
Last year, the Japanese government issued new guidelines on mergers and acquisitions calling on companies not to reject credible takeover offers without sincere consideration.
ACT did not immediately respond to a BBC News request for comment.
source: bbc