Alimentation Couche-Tard is reportedly exchanging proposals for a multi-billion dollar combination with a British retail giant, a deal that would fuel its growth ambitions.
the wall street journal recently reported that talks between the owner of Circle K and the private group EB would value the latter at around US$16 billion or more, including debt.
The merged company, whose head office would be located in Laval, would have annual revenues of more than US$70 billion and would have 21,000 fast food restaurants, gas stations and grocery stores in more than 30 countries.
the wall street journal clarified that people close to the talks were warning that the talks may not result in an agreement.
Analyst Irene Nattel of RBC Dominion Securities says combining two of the world’s largest convenience store chains would be a “compelling potential transaction” and consistent with Couche-Tard’s five-year plan to double in size.
The analyst wrote in a note to clients that Couche-Tard had “sufficient balance sheet capacity” to complete a transaction of this magnitude, but could consider various financing options, including an equity tranche that could be a catalyst for an IPO in the United States.
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