According to the Wall Street Journal, a deal could be announced as early as this week, citing sources familiar with the situation.
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Alimentation Couche-Tard Inc.is reportedly nearing a deal that would increase the ongoing consolidation in the convenience-store industry. CSP said the rumored suitors included Couche-Tard, 7-Eleven parent Seven & i, Marathon Petroleum, OXXO or a private-equity firm.
Couche-Tard ATD.A, -0.12% is the likely victor of an auction of CST, according to people familiar with the matter.
Shares of CST Brands have a market cap of $3.6 billion, and it’s likely Couche-Tard will have tobid even higher than that to get the deal done.
CST operates mainly under the Corner Store brand. “There is no assurance that transactions will result from any of these discussions”, it said in a news release.
San Antonio, Texas-based CST owns and operates convenience stores and gas stations in Canada and the United States, and it controls the general partner of gas station company CrossAmerica Partners LP (CAPL.N).
This review led CST to shed some underperforming assets, including 79 convenience stores in California and Wyoming, which the company sold to 7-Eleven Inc.
“Nonetheless, an analysis of the potential combination of CST’s footprint in Canada and USA and that of Couche-Tard remains intriguing”, she wrote in a report.
“Couche-Tard is a growth company and a disciplined acquirer”, Romer said in an emailed response to BNN.
It operates convenience stores in Canada, the US and Europe under the Couche-Tard, Kangaroo Express, Topaz, Ingo and Circle K brands. The company earned US$1.2 billion on UC$34.1 billion of sales past year, compared to US$11.4 billion of revenues by CST. Last year, the company bought American chain Pantry Inc. for about $860 million.
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On the Toronto Stock Exchange, Alimentation Couche-Tard’s shares gained 2.4 per cent to C$61.55 in Tuesday morning trading.
