For the second time in 12 months, Alimentation Couche-Tard’s largest institutional shareholder is selling $700 million worth of shares in the convenience store chain.
The Caisse de dépôt et placement du Québec is selling 8.7 million Couche-Tard shares at a unit price of $80.50 as part of a private agreement with the management of the Laval company. The transaction is being carried out at a 3% discount to Couche-Tard’s stock price of $82.99 recorded at the close of trading Monday in Toronto.
The Caisse explains its decision by a “periodic rebalancing” of its portfolio. The same reason was also offered this spring when the Caisse sold $600 million worth of shares in Montreal engineering firm WSP and $400 million worth of shares in Montreal IT services company CGI.
Following the transaction, the Caisse will still hold approximately 32.8 million Couche-Tard shares, or approximately 3.5% of the company’s total outstanding shares. At Couche-Tard’s current stock price, this stake is worth $2.7 billion.
The Caisse also sold $700 million worth of Couche-Tard shares last summer, citing a rebalancing of its portfolio.
The sale this summer of a large block of Couche-Tard shares by the Caisse comes a month after management announced that CEO Brian Hannasch will be replaced in September by Alex Miller, currently the company’s chief operating officer.
Couche-Tard repurchases the shares sold by the Caisse for cancellation purposes.
“This transaction is consistent with our opportunistic approach to our share repurchase program and our broader capital allocation priorities, and represents a distinct opportunity to create shareholder value,” said Couche-Tard Chief Financial Officer Filipe Da Silva.
The first vice-president and head of the Caisse for Quebec, Kim Thomassin, emphasizes that the amount collected by monetizing a portion of the investment in Couche-Tard will be reinvested in other Quebec companies.
“As a partner of Alimentation Couche-Tard for nearly 30 years, we will continue to support the expansion of this international leader,” she said in a press release.
Couche-Tard’s stock hit a high of $87 in late February. The stock then fell back to $74 in the spring before rebounding in recent weeks.
Couche-Tard reported a mixed year-end financial performance in late June. Profits for the quarter fell by a third compared to a year earlier. Brian Hannasch had spoken of a transitional situation when commenting on the performance. He had notably mentioned persistent inflation and continued pressure on consumers who are carefully monitoring their spending.