Couche-Tard bids $7.7 billion for Aussie convenience chain

Alimentation Couche-Tard Inc. is proposing the largest acquisition in the company’s history with a $7.7 billion deal for Australia’s largest retail fuel and convenience chain.

The unsolicited purchase offer for Sydney-based Caltex Australia Ltd. — its second this year — would allow the Quebecbased retailer to expand beyond North America and Europe as it aims to double the company’s size.

Couche-Tard CEO Brian Hannasch described the proposal as “a very compelling offer” for Caltex shareholders.

“Alimentation Couche-Tard’ management team has been looking into the AsiaPacific region for several years as a potential market for our continued growth and we see many opportunities,” he said in a news release.

“With Caltex, we see a potential opportunity to leverage our leading global position in the convenience retail market, and we would seek to bring all our operating expertise to bear to help support and grow the Caltex business.”

The proposal for $34.50 AU per share is for the redemption of all Caltex shares outstanding. Couche-Tard already owns about two per cent of Caltex shares.

This is an unsolicited, non-binding, conditional and confidential offer, Caltex said in a statement.

The proposal also includes the payment of certain dividends to shareholders at the time of the eventual takeover.

Caltex says Couche-Tard’s previous offer in October at $32 AU per share was rejected for being value too low.

The proposal includes no material asset sales or divestments and precludes Caltex’s planned property public offering.

Keith Howlett of Desjardins Capital Markets says the offer has likely come to light because Caltex recently announced that it was planning to spin off a 49 per cent interest in 250 retail sites into a REIT. In addition, Caltex shares have performed poorly and the current CEO has announced his plan to retire.

Caltex operates 2,000 service stations where it operates gasoline and retail sales.

Couche-Tard’s convenience store network includes nearly 9,800 stores throughout North America and 2,700 in Europe. It employs almost 133,000 people.