Couche-Tard Extends Statoil Offer for Second Time

"Time is becoming of essence" as it pushes share deadline out to June 8

LAVAL, Quebec -- On Tuesday, Alimentation Couche-Tard Inc. announced--for the second time--that has extended its voluntary offer to June 8, 2012, to acquire all of the issued and outstanding shares of Statoil Fuel & Retail 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, 2012).

Last week, Couche-Tard extended the original deadline from May 21 until May 29, and said that it was "disappointed" by shareholder response to the $2.68 billion bid, which was announced on April 18.

Couche-Tard requires acceptance by 90% of Statoil Fuel & Retail's shareholders. At the time, approximately 67% of the shares had been tendered, including the 54% held by Statoil ASA. The announcement sparked some speculation about the viability of the deal.

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

As of press time, the company had not disclosed how many shares have been tendered to date.

"We are grateful to those Statoil Fuel & Retail shareholders who have accepted our offer to date and we are today extending our offer for a further 10 days to allow the remaining shareholders the opportunity to do so. This extension is crucial for the completion of this transaction, and we outline the fact that we are getting near the end of this process," said Alain Bouchard, president and CEO of Couche-Tard.

"We understand that certain Statoil Fuel & Retail shareholders are either waiting to tender at the last minute to avoid having their shares locked up once tendered or are as yet unclear whether our 53% premium offer represents full value for their shares," he said. "We firmly believe that our all-cash offer does provide full value and is the best transaction for all stakeholders of Statoil Fuel & Retail, including shareholders, employees and customers; it should be understood that this offer is the result of extensive negotiation, has been accepted by Statoil ASA and is recommended by the board of directors of Statoil Fuel & Retail. Furthermore, we are standing by our offer level notwithstanding material falls in global stock market indices and economic uncertainties in Europe since we made our original announcement."

He added, "We remain committed and ready to close this transaction as soon as we receive an appropriate acceptance level. At this stage, we retain all our options, including letting our offer expire, and our shareholders can trust that we will act in their best interests at all times. Although this acquisition remains our preferred transaction, we still remain active on other options, and time is becoming of essence."

Concluded Bouchard: "Thank you to Statoil Fuel & Retail's shareholders that have been and will be supportive of our offer; we are convinced it represents full and immediate value for your investment."

In a research note, TD Securities analyst Michael Van Aelst said, "Considering the comments and tone of the press release and the fact that it was extended [the deadline] without any adjustments to the offer, we believe that Couche-Tard has made some progress in boosting the acceptance rate from the 66.73% received by the first deadline on May 21, likely into the 70s.

He also said, "Expressions of 'disappointment' were absent from this press release, yet Couche-Tard reiterated its position that letting the offer expire and walking away is still an option, and again stressed urgency in reaching its 90% acceptance condition as soon as possible given that there are other files that it would be interested in should the offer for SFR fail. In other words, Couche-Tard continues to pursue other opportunities as a backup plan, and these opportunities are very likely mutually exclusive considering SFR's leading (30%-plus) market shares in Scandinavia; i.e., Couche-Tard could not buy SFR if it were to act on another opportunity with overlapping markets first."

Van Aelst concluded, "We continue to believe that there is a 60% chance that the SFR deal is successfully completed at the current offer price ... or slightly higher; however, considering the lack of competing offers and the possibility that smaller (though still meaningful) c-store chains may be available at more attractive valuations, we would not rule out the potential for Couche-Tard to hold firm on its existing offer and turn its attention to other opportunities shortly should acceptance rates not improve dramatically."

As of Jan. 29, 2012, Laval, Quebec-based Couche-Tard had a network of 5,817 convenience 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).