|Bid||N/A x N/A|
|Ask||N/A x N/A|
|Day's range||14.65 - 14.92|
|52-week range||12.10 - 18.10|
|Beta (5Y monthly)||0.44|
|PE ratio (TTM)||7.59|
|Earnings date||18 Feb 2021|
|Forward dividend & yield||0.23 (1.56%)|
|Ex-dividend date||08 Jun 2020|
|1y target est||18.54|
Canadian convenience store operator Alimentation Couche-Tard Inc has been quietly reassuring shareholders about its growth strategy after its abrupt plan to buy French retailer Carrefour SA befuddled investors and cast doubt about the stock's short-term prospects. Couche-Tard's $20 billion approach for Carrefour was rejected by the French government earlier this month on food security concerns. The bid for Carrefour pushed the Quebec-based company into unchartered territory - an untested market, a relative new business segment and its biggest deal yet - surprising shareholders.
(Bloomberg) -- After a tumultuous week that saw the French government shut down an attempt to take over Carrefour SA, executives at Alimentation Couche-Tard Inc. lamented the timing of events, but not the move.“We regret the surprise. We don’t regret the project,” Chief Executive Officer Brian Hannasch said in an interview Monday. “This was a good deal for Couche-Tard shareholders. It was a good deal for France.”The proposed $20 billion acquisition was still being negotiated when it was reported by Bloomberg on Tuesday. Three days later, Hannasch and Executive Chairman Alain Bouchard received a sharp rejection from French Finance Minister Bruno Le Maire.In between, analysts and investors debated the company’s sharp turn in strategy toward entering the supermarket business. Couche-Tard shares dropped about 13% between the initial report and Thursday’s close, before bouncing back on Friday as it became apparent the deal would sink in a morass of French politics.Read more: Politics Crashes $20 Billion Canadian Shopping Trip to Paris Couche-Tard executives outlined their approach during a call with analysts Monday, saying they thoroughly researched the target, visiting some 500 stores in the weeks before Christmas.The combination would have propelled the Laval, Quebec-based company into the top ranks of global retailers, giving it the scale to navigate a fast-changing landscape where consumers want various store formats and shopping options, the executives said.Couche-Tard’s focus until now has been convenience stores and gas stations with more than 14,000 locations across North America, Europe, Asia and Latin America. That could change even without Carrefour in its shopping cart.“We are more than just a small box retailer,” Hannasch said. “The world is changing and it’s going to take competitors with the right scale, and the right culture, and the right focus to win.”Read more: Couche-Tard to Pursue Other Deals After Carrefour FailureCarrefour, best-known for huge out-of-town stores that sell everything from baguettes to T-shirts to grass seed, has scaled back its hypermarkets while investing in convenience stores, e-commerce and organic food under Chief Executive Officer Alexandre Bompard.Hannasch said Couche-Tard was supportive of Carrefour’s strategy, which also focuses on better understanding the customer and getting the pricing right. “What we thought we could bring was just an acceleration of the operational focus on running the business well,” he said in interview.In the short term, Couche-Tard was also in a good position to help Carrefour speed up plans to add 3,000 convenience stores to a current network of more than 7,000, Hannasch said.Geographic FitSpeaking to analysts, Hannasch touted the complementary geographies of the two companies. Couche-Tard has stores in Norway, Poland and other European countries but is absent from key markets in Western Europe and South America where Carrefour operates, including France, Spain and Brazil.As they now consider a looser alliance, Couche-Tard can learn from Carrefour’s expertise in bakery and ready-made meals, Hannasch said.The thwarted deal gave investors a peek at where Bouchard, one of Canada’s richest men, is thinking of taking Couche-Tard. Besides grocers, the company has looked at dollar stores, quick-service restaurants and stores at train stations or airports, Hannasch said.But food and fuel remain the products the company is focusing on -- and acquisitions are in its DNA, he said.Couche-Tard shares were up 1.6% in Toronto at 3:16 p.m., not enough to recover all of last week’s losses. The share drop upset Bouchard, who reminded analysts of past deals that had surprised investors too, only to prove successful. Carrefour fell 6.9% on Monday, the most since March, extending its decline for a third session.Since 2011, earnings before interest, taxes, depreciation and amortization have grown an average 22% a year, Hannasch added.“Long-term shareholders stayed with us,” Bouchard said in an interview. “There was maybe an emotional reaction from some portfolio managers there -- and we didn’t deserve that.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Executives at Alimentation Couche-Tard Inc. defended a failed bid for Carrefour SA and said they would still like to buy the French grocer some day, but will turn their focus to other potential deals.The Canadian convenience store operator made a $20 billion offer that was shot down by French Finance Minister Bruno Le Maire on Friday. The bid caught investors off guard because Couche-Tard does not operate supermarkets.In response to criticism of the deal, Couche-Tard executive chairman Alain Bouchard said previous large acquisition -- including the 2003 acquisition of Circle K -- also surprised the market, but they worked out.“Over the last decades while growing our business we have made many bold moves, some of which were not always obvious to our stakeholders,” Bouchard said on a conference call with investors Monday.“Was I hoping our bold approach to Carrefour would have turned out differently? Of course. Yet I’m tremendously proud that Couche-Tard had the financial strength and acumen to make such an offer.”Couche-Tard shares were up 2.2% to C$38.81 as of 10:16 a.m. in Toronto. They were down nearly 11% last week. Carrefour fell as much as 7.6% in Paris.The companies announced the end of negotiations on Saturday, four days after Bloomberg first reported the talks, and said they’ll work instead on a looser alliance in areas including fuel purchasing and product distribution.Couche-Tard executives gave few details on that alliance Monday, calling the talks exploratory. Chief Executive Officer Brian Hannasch said there is a “robust” set of other acquisitions to examine as it pursues a five-year goal of doubling profit by 2023.Hannasch said the door is open to a future Carrefour merger if the political climate in France changes.“I’m old enough to believe there’s no such thing as permanently,” he said. “We’d love to do the transaction, so if we got signals that the environment could change or would change from the French government or the key stakeholders, we’d love the opportunity to re-engage -- under the right conditions and assuming we haven’t found another way to create more value for our shareholders.”The Laval, Quebec-based company has been making headway on its growth plans even without a major acquisition in recent years. Analysts expect adjusted earnings per share to be 16% higher for the fiscal year that ends in April, according to data compiled by Bloomberg. Even so, its valuation has dipped.The chain has been improving its coffee and adding fresh food offerings, which come with higher margins. It’s digging into analytics to improve pricing and promotions, and planning to roll out electric vehicle charging stations in North America after learning from its experience in Norway.Couche-Tard strengthened its foothold in Asia by buying about 370 stores in Hong Kong and Macau that previously were Circle K brand licensees. But a large takeover has remained elusive since it signed a $4 billion purchase of Texas-based CST Brands Inc. in 2016.In April, the company walked away from a $5.6 billion proposal for gas station chain Caltex Australia Ltd. (now known as Ampol Ltd.), citing pandemic uncertainty. And it missed out on Marathon Petroleum Corp.’s Speedway gas stations, which were scooped up in August by Japan’s Seven & i Holdings Co., the world’s largest convenience store operator, for $21 billion.Balance SheetCouche-Tard executives have scoffed at the valuation of Speedway. Addressing shareholders at the company’s annual meeting in September, Bouchard cited it as an example of the company’s discipline around acquisitions.The balance sheet leaves it in a good place to hunt for deals. The company had about $5.5 billion in net debt at the end of its October quarter, according to data compiled by Bloomberg. It’s earned $3.5 billion in operating profit in the last four quarters.Chief Financial Officer Claude Tessier told analysts in November that the current debt ratio is at half of Couche-Tard’s comfort level.(Updates share price move in sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.