SAN ANTONIO -- Bringing the process another step closer to completion, CST Brands Inc. stockholders approved at a special meeting on Nov. 16 the previously announced merger agreement with a U.S. subsidiary of Alimentation Couche-Tard Inc.
Couche-Tard announced in August its intention to acquire CST Brands for approximately $4.43 billion after a review. The transaction remains subject to customary closing conditions, including the receipt of necessary governmental and regulatory approvals. The companies expect the deal to close in early 2017. When the merger is completed, CST will become an indirect wholly owned subsidiary of Circle K.
- For a detailed timeline of the deal, click here.
As reported in a McLane/CSP Daily News Flash, stockholders representing approximately 84% of the total shares outstanding as of the Oct. 7, 2016, record date voted at the special meeting, and approximately 99.7% of those shareholders voted in favor of the deal.
Under the terms of the merger agreement, CST stockholders will receive $48.53 in cash per share, without interest.
CST stockholders also approved, on a nonbinding, advisory basis, the compensation that the company may pay to certain CST executive officers in connection with the merger.
CEO Kim Lubel suggested activist shareholders rushed CST into a sale. Their less-than-enthusiastic views on the company’s progress precipitated the board’s strategic review that led to the sale.
“When we came out of our second anniversary, we were continuing to grow, continuing to implement our programs, but [it was] about a three-year payout for the programs we put in place,” she told Fortune magazine recently. “And in today’s public markets, shareholders are looking for quarter-by-quarter, short term kind of focus.”
Expansion via the acquisition of Flash Foods in late 2015 and new-to-industry (NTI) stores, gains from the sale of convenience stores in two western states to 7-Eleven Inc. in July 2016 and merchandise sales increases in the United States and Canada all helped CST’s bottom line in third-quarter 2016 ahead of the merger.
CST, based in San Antonio, has more than 2,000 locations throughout the southwestern United States, Georgia, Florida, New York and eastern Canada. In the United States, it operates Corner Stores, Nice N Easy Grocery Shoppes and Flash Foods convenience stores. In Canada, CST is the exclusive provider of Ultramar fuel at its Depanneur du Coin and Corner Stores. CST also owns the general partner of CrossAmerica Partners LP, a master limited partnership and wholesale distributor of fuels, based in Allentown, Pa.
Laval, Quebec-based Couche-Tard’s global retail network includes more than 12,000 locations, primarily under the Circle K brand. In North America, its network consists of approximately 7,875 convenience stores, including approximately 6,475 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 retail network across Scandinavia, Ireland, Poland, the Baltics States and Russia through 10 business units. Of the more than 2,700 stores, most sell motor fuel and c-store products, while the others are unmanned automated fueling sites.
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