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Couche-Tard Secures Statoil

With 95% of shares acquired, ACT looks to next deals in U.S., Canada, Europe

LAVAL, Quebec -- While focus for Alimentation Couche-Tard Inc. is firmly on Europe, Couche-Tard is not taking its eyes off of North America. In a conference call Thursday from Oslo to formally announce the successful buyout of Statoil Fuel & Retail ASA in Norway, Alain Bouchard, president and CEO, said Couche-Tard and its Circle K chain will not stop growing in the United States and Canada.

In fact, Bouchard said, "We are working on some [possibilities] in market the there and will continue that."

Couche-Tard announced that its offer, through its wholly owned subsidiary Couche-Tard Norway AS, for all the shares of Statoil Fuel & Retail ASA, as per expiration of the offer on June 20, 2012, received acceptances for 282,213,068 shares, representing 94.07% of the outstanding shares and votes in SFR.

In addition to the shares tendered, Couche-Tard has as of June 20, through its wholly owned subsidiary Couche-Tard Inc., purchased 7,942,737 shares in SFR, equal to 2.65% of the outstanding shares and votes, in the market (at prices not exceeding the offer price), none of which have been settled as of Thursday, but settlement will take place as soon as possible, the company said.

Couche-Tard now owns or has rights to 290,155,805 shares, equal to 96.72% of the outstanding shares and votes in SFR, it said.

Couche-Tard said that it intends to make purchases of SFR shares in the market. The company will, as earlier announced, initiate a compulsory acquisition of any remaining shares in SFR in compliance with Norwegian law.

Settlement for shares tendered under the voluntary offer in the period from June 13 through June 20 will occur on June 26.

"We expect Couche-Tard to own 100% of SFR by the end of August," Michael Van Aelst, an analyst with TD Securities, Montreal, wrote in a research note.

Couche-Tard announced the $2.7 billion bid on April 18. The all-cash offer for all the issued and outstanding shares of Statoil was for 51.20 Norwegian Krone ($8.93 U.S.) per share in cash (53.00 Krone [$9.22 U.S.] before dividend of 1.80 Krone paid to shareholders on May 9).

(Click herefor previous CSP Daily News coverage of the deal.)

"Based on our experience [after Couche-Tard acquired Circle K in 2003] deal, we do believe that the shares have the potential to be more volatile over the next few years as the first disappointing result out of Europe (even if it is temporary) will likely lead to some analysts and investors questioning the company's European strategy. This exactly is what occurred in the U.S. a decade ago when the first Circle K earnings disappointed due to a lower fuel margin, but few are questioning management's ability to add value in the U.S. any longer," added Van Aelst.

On the call, Jacob Schram, CEO of SFR said that while the buyout "completed SFR's IPO chapter as a stock-listed company, at the same time, it opens up a new chapter predominantly focused on growing the business in Europe."

Couche-Tard said that it plans to run Statoil Fuel & Retail as a standalone business unit and retain existing management. It has the right to use the Statoil name for eight years. The intent is to have SFR act as the European platform of Couche-Tard's business, with the headquarters being SFR's current Oslo offices.

"Now with this big start in Europe, everybody noticed who we are and we got calls," said Bouchard.

There is "lots" of merger and acquisitions activity on the continent at the moment, Bouchard said. He declined to provide further details about discussions taking place.

Germany is on Couche-Tard's radar and "at the top of the list" for its next acquisition, company chief financial officer Raymond Pare said April 19. He said Couche-Tard has already identified the targets it wants to buy.

As of Jan. 29, 2012, Laval, Quebec-based Couche-Tard had a network of 5,817 c-stores, 4,225 of which include motor fuel dispensing. It supplies motor fuel to 338 sites operated by independent operators. Couche-Tard's network consists of 13 business units, including nine in the United States covering 42 states and the District of Columbia (primarily under the Circle K flag), and four in Canada covering all 10 provinces (primarily under the Mac's and Couche-Tard flags).

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