LAVAL, Quebec –Alimentation Couche-Tard Inc. chairman Alain Bouchard said a solution can be found over the next five years to protect the convenience-store chain from the threat of a hostile takeover, reported the Canadian Press.
Bouchard's comments at Tuesday’s annual shareholder meeting come a year after opposition from large institutional investors forced Couche-Tard’s four founders to withdraw a shareholder vote on extending their voting advantage.
Bouchard declined to detail available options, but he said an agreement is possible that eliminates the need for a formal vote.
He said he would never go around shareholders. “I’m too respectful of our shareholders, even the ones that didn’t support me,” he told reporters after the company’s annual meeting.
The founders last year withdrew a proposal allowing them to retain multiple voting share as long as one sits on the company’s board. Under the current “sunset clause” set to expire in five years, the advantage ends when the last of the four turns 65 or dies. Jacques D’Amours reaches that age in December 2021, while Bouchard, Richard Fortin and Real Plourde are all at least 65.
The founders require support from two-thirds of shareholders to make any change.
They faced opposition last year from proxy advisory firm Institutional Shareholder Services, which many large companies follow in casting their votes.
Bouchard said there appears to be more support now for the proposal.
Mutual-fund giant Fidelity Investments is among the big investors opposed to the proposal to maintain the founders’ control, sources told The Globe and Mail.
But founders’ control is not the main issue for Fidelity, the report said. It is more concerned over the passing of the control stake to the founders’ children, who might not be able to provide the same shareholder returns of the founding partners, the sources told the newspaper.
Bouchard also defended Couche-Tard’s new CEO, Brian Hannasch, against shareholder Yvon Gagnon’s criticism of Hannasch’s lack of ability to speak French.
“I find this somewhat insulting,” Gagnon said, pointing out that Bouchard promised two years ago that the American-born CEO would learn French.
“I steered him in another direction,” said Bouchard, according to the Globe and Mail. “We worked on expanding the company. There wasn’t any time” for French lessons.
The annual meeting is still conducted mostly in French.
Meanwhile, Bouchard said he is not opposed to government efforts to increase minimum wages to $15 per hour, but said the result would be higher prices as the costs would be passed to consumers.
Couche-Tard’s retail network includes more than 12,000 locations, primarily under the Circle K brand. In North America, its network consists of 7,863 convenience stores, including 6,474 stores selling motor fuel. It has 15 business units, including 11 in the United States covering 41 states and four in Canada covering all 10 provinces.
In Europe, Couche-Tard operates a broad retail network across Scandinavia, Ireland, Poland, the Baltic states and Russia through 10 business units. Of the 2,708 stores, most sell motor fuel and c-store products, while the others are unmanned automated fueling sites. Also, under licensing agreements, more than 1,500 stores are operated under the Circle K banner in 13 other countries and territories worldwide (China, Costa Rica, Egypt, Guam, Honduras, Hong Kong, Indonesia, Macau, Malaysia, Mexico, the Philippines, the United Arab Emirates and Vietnam).
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