Couche-Tard to Buy Retailer CST for $3.7 Billion -- WSJ
August 23 2016 - 3:03AM
Dow Jones News
By Joshua Jamerson
Alimentation Couche-Tard Inc. agreed to buy CST Brands Inc. for
roughly $3.67 billion, a merger that would sharply consolidate the
convenience store industry.
The transaction, at $48.53 a share in cash, represents a 42%
premium to CST's closing price on March 3, the last day prior to
CST announcing it would explore strategic alternatives. It is a
2.1% premium to Friday's closing price of $47.51.
Couche-Tard said the deal is worth $4.4 billion including net
debt assumed. The transaction, expected to close in early 2017, is
subject to the regulatory approval and a CST shareholder vote.
Couche-Tard, which last year bought American chain Pantry Inc.
for about $860 million, has been a consolidator in the
convenience-store sector, seeking to combine complementary
operations and eliminate overlapping costs.
The Wall Street Journal last week reported that a deal was
imminent. CST has more than 1,000 stores in the southwestern U.S.
as well as in New York and Eastern Canada. It was spun off from
Valero Energy Corp. in 2013. Earlier this year, the San Antonio
company announced it was exploring strategic alternatives amid
pressure from activist shareholders. Last year, CST had $11.4
billion in revenue.
Engine Capital LP in December called on CST to explore options,
saying it could attract a buyer at $50 to $55 a share. CST shares
edged down 0.2% to $47.40 in premarket trading.
Couche-Tard said it also would sell certain Canadian assets of
CST, which operates predominantly under the Corner Store name,
after the merger for approximately $750 million.
Couche-Tard operates convenience stores in Canada, the U.S. and
Europe under the Couche-Tard, Kangaroo Express, Topaz, Ingo and
Circle K brands. Upon completion of the transaction, Couche-Tard
said it will establish a new business unit in San Antonio with
attached shared services operations.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
August 23, 2016 02:48 ET (06:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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