Transaction Creates a Leading North American
Convenience Store Operator Committed to Customer Service and
Operational Excellence
Delivers Immediate and Compelling Value to CST
Stockholders
Merged Company Values Maintaining Significant
Presence in San Antonio
CST Brands, Inc. (NYSE: CST), one of the largest independent
retailers of motor fuels and convenience merchandise in North
America, today announced that its Board of Directors has
unanimously approved a definitive merger agreement with
Alimentation Couche-Tard Inc. (TSX: ATD.A ATD.B) (“Couche-Tard”),
under which Couche-Tard will acquire all of the shares of CST for
$48.53 per share in cash, representing a total enterprise value of
approximately $4.4 billion, including the assumption of net
debt.
The transaction value represents a premium of approximately 42
percent to CST’s closing stock price on March 3, 2016, the last
date prior to CST announcing that its Board commenced an
exploration of strategic alternatives to further enhance
stockholder value. The transaction also represents a premium of
approximately 61 percent since May 1, 2013, the last date prior to
regular way trading of CST following the Company’s spin off.
Couche-Tard is a global leader in the convenience and fuel
retail industry, with a strong Circle K brand across the U.S.
Together, Couche-Tard and CST will join on the journey to become
the world’s preferred destination for convenience and fuel.
“After the Board’s comprehensive review of strategic
alternatives to enhance stockholder value, we are pleased to reach
this agreement with Couche-Tard, which we expect to provide
immediate and compelling value to our stockholders,” said Kim
Lubel, Chairman, Chief Executive Officer and President of CST. “Our
Board believes that Couche-Tard is an ideal partner for CST. With
Couche-Tard, we will build upon an extensive and attractive
convenience and fuel network with enhanced scale and global reach
to best position the combined company for future growth.
Importantly, our employees will benefit from new opportunities for
career development as part of a larger, global company. We look
forward to working closely with Couche-Tard to seamlessly complete
the transaction and ensure a smooth integration.”
New Circle K Division in San Antonio
Upon completion of the transaction, Circle K will establish a
new business unit in San Antonio with attached shared services
operations.
Transaction Details and Approvals
Couche-Tard expects to finance the transaction with available
cash, its existing credit facilities and a new term loan. The
transaction is currently expected to close early calendar year
2017, subject to the approval of CST's stockholders and regulatory
approvals in the United States and Canada.
Advisors
BofA Merrill Lynch is serving as lead financial advisor and J.P.
Morgan Chase is also serving as financial advisor to CST. Wachtell,
Lipton, Rosen & Katz and Stikeman Elliott are acting as legal
advisors to CST.
About CST Brands, Inc.
CST Brands, Inc. (NYSE: CST), a Fortune 500 Company, is one of
the largest independent retailers of motor fuels and convenience
merchandise in North America. Based in San Antonio, Texas, CST
employs over 14,000 Team Members at over 2,000 locations throughout
the Southwestern United States, Georgia, Florida, New York and
Eastern Canada offering a broad array of convenience merchandise,
beverages, snacks and prepared fresh food. In the U.S., Corner
Stores, Nice N Easy Grocery Shoppes, and Flash Foods stores proudly
sell a broad offering of branded and unbranded fuel and proprietary
baked goods and fresh food, packaged private label products, U
Force energy and sport drinks, Freestyle soft drinks and signature
ICEE drinks. In Canada, CST is the exclusive provider of Ultramar
fuel and its Dépanneur du Coin and Corner Stores sell signature
Transit Café coffee, proprietary baked goods and fresh food and
private label packaged goods. CST also owns the general partner of
CrossAmerica Partners LP, a master limited partnership and
wholesale distributor of fuels, based in Allentown, Pennsylvania.
For more information about CST, please visit www.cstbrands.com.
Important Additional Information
In connection with the proposed transaction, CST intends to file
a proxy statement and other relevant documents concerning the
proposed transaction with the SEC. The definitive proxy statement
will be sent or given to CST stockholders and will contain
important information about the proposed transaction. INVESTORS AND
SECURITY HOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY
THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE
SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS,
WHEN THEY BECOME AVAILABLE. Investors and security holders will be
able to obtain a copy of the proxy statement as well as other
documents filed with the SEC free of charge at the SEC’s website at
http://www.sec.gov. In addition, the proxy statement, the SEC
filings that will be incorporated by reference in the proxy
statement and the other documents filed with the SEC by CST may be
obtained free of charge from CST’s Investor Relations page on its
corporate website at http://www.cstbrands.com.
Certain Information Concerning Participants
CST and its directors, executive officers, and certain other
members of management and employees may be deemed to be
participants in the solicitation of proxies from CST stockholders
in connection with the proposed transaction. Information about the
directors and executive officers of CST is set forth in CST’s
Annual Report on Form 10-K for the year ended December 31, 2015 and
the proxy statement on Schedule 14A for CST’s 2015 Annual Meeting
of Stockholders, which was filed with the SEC on April 29, 2016.
Additional information regarding participants in the proxy
solicitation may be obtained by reading the proxy statement
regarding the proposed transaction when it becomes available.
Forward Looking Statements
Statements made in this press release relating to future plans,
events, or financial condition or performance are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements can generally
be identified by the use of words such as "expect," "plan,"
"anticipate," "intend," "outlook," "guidance," "believes,"
"should," "target," "goal," "forecast," "will," "may" or words of
similar meaning. Forward-looking statements are likely to address
matters such as the companies’ respective or combined anticipated
sales, expenses, margins, tax rates, capital expenditures, profits,
cash flows, liquidity and debt levels, as well as their pricing and
merchandising strategies and their anticipated impact and
intentions with respect to acquisitions, the construction of new
stores, including additional quick service restaurants, and the
remodeling and addition of new equipment and products to existing
stores. These forward-looking statements are based on the
companies’ current plans and expectations and involve a number of
risks and uncertainties that could cause actual results and events
to vary materially from the results and events anticipated or
implied by such forward-looking statements.
The following factors, among others, could cause actual results
and events to differ materially from those expressed or implied in
the forward-looking statements: (1) the occurrence of any event,
change or other circumstances that could give rise to the
termination of the merger agreement; (2) the inability to complete
the transactions contemplated by the merger agreement in a timely
manner or at all, including due to the failure to obtain the
required stockholder approval or failure to receive necessary
governmental or regulatory approvals required to complete the
transactions contemplated by the merger agreement; (3) the risk of
not fully realizing expected synergies in the timeframe expected or
at all; (4) the risk that the proposed transactions disrupt current
plans and operations, increase operating costs, result in
management distraction and the potential difficulties in
maintaining relationships with customers, suppliers and other third
parties and employee retention as a result of the announcement and
consummation of such transactions; (5) the outcome of any legal
proceedings that may be instituted against the companies following
announcement of the merger agreement and transactions contemplated
therein; and (6) the possibility that the companies may be
adversely affected by other economic, business, and/or competitive
factors.
Any number of other factors could affect actual results and
events, including, without limitation; the ability to enhance
operating performance through in-store initiatives, store remodel
programs and the addition of new equipment and products to existing
stores; fluctuations in domestic and global petroleum and fuel
markets; realizing expected benefits from fuel supply agreements;
changes in the competitive landscape of the convenience store
industry, including fuel stations and other non-traditional
retailers located in the companies’ markets; the effect of national
and regional economic conditions on the convenience store industry
and the companies’ markets; the global financial crisis and
uncertainty in global economic conditions; wholesale cost increases
of, and tax increases on, tobacco products; the effect of regional
weather conditions and climate change on customer traffic and
spending; legal, technological, political and scientific
developments regarding climate change; financial difficulties of
suppliers, including the companies’ principal suppliers of fuel and
merchandise, and their ability to continue to supply their stores;
the companies’ financial leverage and debt covenants; a disruption
of IT systems or a failure to protect sensitive customer, employee
or vendor data; the ability to identify suitable acquisition
targets and to take advantage of expected synergies in connection
with acquisitions; the actual operating results of new or acquired
stores; the ability to divest non-core assets; environmental risks
associated with selling petroleum products; governmental laws and
regulations, including those relating to the environment and the
impact of mandated health care laws; and unanticipated legal and
other expenses. These and other risk factors are discussed in
Alimentation Couche-Tard Inc. and CST Brands, Inc.’s filings with
securities authorities in Canada and the United States,
respectively. While the companies may elect to update these
forward-looking statements at some point in the future, they
specifically disclaim any obligation to do so.
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version on businesswire.com: http://www.businesswire.com/news/home/20160822005262/en/
CST Brands, Inc.Investors:Randy Palmer, 210-692-2160Executive
Director – Investor RelationsOrMedia:Lisa Koenig,
210-692-2659Director of CommunicationsOrJoele Frank, Wilkinson
Brimmer KatcherEric Brielmann, Joseph Sala or Nick Leasure,
212-355-4449
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