Carrefour Trades Lower After Couche-Tard Deal Falls Through
By Joshua Stein
Carrefour shares fell Monday after a proposed takeover by
Canadian convenience-store operator Alimentation Couche-Tard Inc.
was discontinued by the two companies amid opposition from the
At 1004 GMT, Carrefour traded 5.8% lower at EUR15.64.
The companies said Saturday that takeover talks had ended after
the French government said it would block any takeover bid for
Carrefour. Couche-Tard had previously made a non-binding takeover
offer of 20 euros a share, valuing the company at around 16.1
billion euros ($19.44 billion).
After news of the takeover was reported, French Finance and
Economy Minister Bruno Le Maire expressed firm opposition, pointing
to the group's employee base in France and its importance to food
distribution nationwide. He reportedly confirmed this opposition to
Couche-Tard Chairman Alain Bouchard in a closed-door meeting in
Paris on Friday.
The government's opposition to the deal may have been prompted
by a desire not to lose votes to the protectionist far-right in
next year's presidential elections, Bryan Garnier analyst Clement
Genelot said. Since this is the only major barrier to a deal, a
resumption of talks post-election remains a possibility, he
According to Citi analyst Nick Coulter, while the acquisition
would have been "pragmatic and shareholder friendly", Carrefour
should now increase its attractiveness by itself using its stronger
asset base to drive substantial free cash flow. Carrefour's French
business could be set to improve its profitability, he said, noting
that Carrefour's best country manager has recently arrived to head
In the meantime, the market will turn its attention to the
company's performance in 2020, Bryan Garnier said. The investment
bank increased its expectations for Carrefour's performance in the
fourth quarter, largely due to successes in France and Latin
Write to Joshua Stein at firstname.lastname@example.org
(END) Dow Jones Newswires
January 18, 2021 05:41 ET (10:41 GMT)
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