TOKYO (Reuters) - Japan's Itochu has decided not to participate in a buyout for Seven & i Holdings put forward by the retailer's founding family, the Nikkei newspaper reported on Wednesday.

After receiving a takeover bid from Canada's Alimentation Couche-Tard last year, Seven & i's founding Ito family started talks to take the company private for an estimated $58 billion.

Itochu had considered investing 1 trillion yen ($6.69 billion) in the deal but ultimately saw low synergies between its food and beverage business and Seven & i, Nikkei said.

Itochu's reported participation was seen as somewhat difficult to begin with, given that the trading house already owns one of Seven & i's competitors, convenience store chain FamilyMart.

The Ito family has approached a number of private equity firms about supporting their bid, sources have said. If it materialises, the management buyout would be the largest in history.

Apollo Global Management is considering investing as much as 1.5 trillion yen in the deal, Bloomberg News reported last month.

($1 = 149.4400 yen)

(Reporting by Rocky Swift; Editing by Christian Schmollinger and Christina Fincher)

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