Żabka Stock Plummets Over 10% After 7-Eleven Owner Halts Investment Talks

Shares of Żabka Group SA plunged in Monday trading after Japan's Seven & i Holdings, the operator of the 7-Eleven convenience store network, announced it had terminated negotiations for a significant investment in the Polish retailer.

The stock fell by as much as 10.3% to trade at PLN 27.95 on the Warsaw Stock Exchange, erasing weeks of gains built on speculation of the now-abandoned deal.

Deal Collapse Triggers Sell-Off

The sell-off was a direct reaction to a weekend announcement from Seven & i Holdings. The Japanese firm confirmed it had ended talks, citing an inability to reach an agreement on terms it considered "most favorable for its own shareholders and stakeholders."

Because the announcement was made on Saturday while the market was closed, investors' first opportunity to react was at Monday's open, leading to immediate and heavy selling pressure. The decline wiped out an approximate 20% rally that began on July 16, when Nikkei first reported that a deal for a double-digit stake was in its final stages.

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Compounding Factors and Market Impact

The failed deal was not the only headwind facing the stock. The sharp drop was exacerbated by several converging factors:

• Analyst Downgrade: Citi had already downgraded Żabka stock to 'Sell' on July 23 with a price target of PLN 25.00, a move that had already begun to weigh on sentiment.
• Dividend Record Date: Monday also marked the dividend record date for the stock, a technical event that can exert mechanical downward pressure on a share price as it adjusts for the upcoming payout.

The decline appears to be entirely company-specific. Poland's broader WIG20 index was trading higher on the day, and shares of competitor Eurocash SA were not materially affected by the news.