Metro in talks to ac­quire Jean Coutu for $3.62 bil­lion

The Gulf Today - Business - - 4international -

TORONTO: Metro, Canada’s third-big­gest food re­tailer, said it was in talks to buy phar­macy chain Jean Coutu Group in a deal that val­ues the com­pany at C$4.5 bil­lion ($3.62 bil­lion), send­ing shares of the tar­get surg­ing to multi-year highs.

Jean Coutu op­er­ates pharma stores in Que­bec, New Bruns­wick and On­tario, and it ac­quired a generic drug maker in 2007. Metro op­er­ates more than 600 food stores across Canada.

Mon­treal-based Metro is of­fer­ing C$24.50 per share for the Varennes, Que­bec-based Jean Coutu, the com­pa­nies said in a state­ment. That rep­re­sents a 6.1 per cent pre­mium to Jean Coutu’s price be­fore a trad­ing halt.

Jean Coutu shares jumped as much as 6.8 per cent to their high­est level since April 2015 af­ter the an­nounce­ment. They were trad­ing up 4.9 per cent at C$24.24.

Metro shares ad­vanced as much as 5.8 per cent, their big­gest in­tra­day gain since April, to C$42.41.

Metro’s of­fer con­sists of 75 per cent in cash and 25 per cent in its shares, the com­pa­nies said in a state­ment. The Coutu fam­ily has said it will sup­port the deal, ac­cord­ing to the state­ment.

The news comes at a chal­leng­ing time for both Que­bec-based com­pa­nies, as com­pe­ti­tion ramps up among food re­tail­ers and pro­vin­cial reg­u­la­tions over drug pric­ing weigh on phar­ma­ceu­ti­cals.

Que­bec in July an­nounced a deal with generic drug man­u­fac­tur­ers to cut costs for the prov­ince that an­a­lysts said would hurt the prof­itabil­ity of Jean Coutu’s generic drug man­u­fac­tur­ing di­vi­sion.

Newspapers in English

Newspapers from UAE

© PressReader. All rights reserved.