Efforts to keep Seven & I Holdings in the founding family faltered after Japanese trading house Itochu failed to secure $58 billion for the deal in a joint management buyout bid that would have allowed the retail giant to go private, the companies said Thursday.

The news would place Alimentation Couche-Tard’s offer back in the limelight. Shares of Seven & I Holdings dropped more than 12% on Thursday, closing at ¥2,118, down 10.95% from the day before.

“There is no actionable proposal from Mr. Junro Ito and Ito-Kogyo for 7&i to consider at this time,” Seven & I said in a statement.

Itochu, which was considering making a ¥1 trillion investment, confirmed that it dropped its acquisition proposal for Seven & I Holdings in a separate statement.

“We have been earnestly considering the request from the founding family for participation as a strategic partner in their acquisition proposal. ... However, we would like to inform you that we have decided to terminate our consideration of this matter,” the statement read.

An individual with an understanding of the deal said Itochu and Seven & I lacked sufficient synergy for return on the considered investment.

With Itochu’s current buyout plan no longer an option, Seven & I needs to consider Couche-Tard’s offer if the regulatory path is cleared, said Kei Okamura, managing director and portfolio manager of Japanese Equities at Neuberger Berman.

“Boards will be held accountable if they don't consider bids that would enhance corporate value over the mid to long term. Seven & I is not an exception to that,” Okamura said.

“It comes down to math — if this is a good deal for shareholders, they have to accept it,” he said.

Itochu’s bid for Seven & I had made sense given that the company plays some role within their value chains, and the ¥1 trillion figure Itochu had floated was high.

“That was a bit surprising, because it's a sizable amount of capital to be deployed,” said Okamura, noting it was roughly the same figure the company had publicly budgeted for M&A related investments across the period of one fiscal year.

The fact that Seven & I may be an enticing offer is something the company’s family is acutely aware of.

Junro Ito — Seven & I’s vice president and the son of the late Masatoshi Ito the billionaire who catapulted 7-Eleven convenience stores to global acclaim — is the company’s second-largest shareholder with a 8.2% stake held through Ito-Kogyo, a company he founded.

Last year, the founding family made the buyout proposal to combat the acquisition proposal from Couche-Tard, the Canadian operator of the Circle K convenience store chain.

This followed Seven & I rejecting a $31 billion buyout bid from Couche-Tard, which it argued “grossly undervalues” the company. Couche-Tard later increased its offer to $47 billion.

Seven & I Holdings remains “committed to exploring all opportunities to unlock value for shareholders and continues to assess a full range of strategic alternatives, including the proposal from Alimentation Couche-Tard, Inc.,” according to the company’s statement.

While it was considering the company’s offer, it flagged challenges, noting that its special committee was “engaging constructively” with Couche-Tard to determine whether a proposal could be achieved “that addresses the serious U.S. antitrust challenges that any such transaction would face.”