LAVAL, Quebec -- Add BP's convenience stores to the growing list of U.S. possible acquisition targets for Alimentation Couche-Tard Inc., which said Friday it is interested in purchasing some of the more than 700 locations BP plans to sell in the United States over the next two years, according to the Canadian Press.
The Laval, Quebec-based retailer said Friday its interest is piqued because the company operates in some of the same markets as the BP company-owned and -operated stores. Richard Fortin, Couche-Tard's CFO, said the company's wasn't aware [image-nocss] of BP's specific streamlining plan for its gas station/c-store network, but considers all opportunities for acquisitions as part of its U.S. expansion plans.
BP announced last Thursday that it will sell more than 700 stores, eliminating nearly 10,000 jobs. The company said most of the sites will be sold to franchise owners, while some will be sold to dealers and large distributors. The sites will continue to sell BP fuels in the eastern United States and ARCO fuels in the western United States, with the store brand to be known as ampm nationwide. About 95% of BP's 13,000 U.S. retail sites currently are independently operated.
Couche-Tard operates a network of 5,615 convenience stores, 3,444 of which include gasoline dispensing, across 29 U.S. states and six Canadian provinces. The company operates through Couche-Tard and Macs brands in Canada and the Circle K banner in the United States.
Desjardins Securities analyst Jessy Hayem told The Globe & Mail's Market Blog that "Couche-Tard is very well positioned to undertake such an acquisition, both financially and as a strategic partner to BP, just as is the case with Shell."
Earlier this fall, Couche-Tard signalled a possible interest in bidding for some of the 2,000 U.S. retail outlets that Shell plans to unload in coming years. Couche-Tard launched its entry into the United States in 2001 by purchasing 225-store Johnson Oil, which had half its fuel supplied by Shell. Couche-Tard acquired 26 stores from BP Products North America in Tennessee in 2005, and 236 Shell outlets in 2006, said the report.
"We are always interested in any asset that can become available in the U.S. that can fit with our existing network," Fortin told CP at the time. "So if Shell really intends to sell some other assets and they are offered to us, we might be interested."
Newcrest (TD Securities) analyst Michael Van Aelst said in October that Couche-Tard "would at the least be interested in the remaining Illinois, Florida and California [Shell] sites, said Van Aelst. If there are enough sites in markets new to Couche-Tard to give it scale, we believe they would be of interest, as well. Couche-Tard has already acquired about a third of the Shell stores divested to date, so we would have to believe that it is well positioned for the next round. This is particularly true for some of the stores in Chicago where [Couche-Tard] has been managing 31 of them as a test since August of 2006.
Van Aelst further speculated that poor performance by Sanford, N.C.-based regional convenience retailer The Pantry and resulting diminished stock prices have made it a target for purchase by Couche-Tard. The Pantry, which operates 1,644 stores in 11 states, had no comment at the time.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.