LAVAL, Quebec — Citing the uncertainty over the COVID-19 pandemic, Alimentation Couche-Tard Inc. has ended its bid to acquire Caltex Australia Ltd.
“Given that uncertainty and the impact it is having on our outlook for Caltex's business, and consistent with Couche-Tard's disciplined approach to acquisitions, the company is not in a position to make a revised proposal at this time, despite having secured the necessary financing commitments,” the global retailer said.
Caltex Australia is that country’s leading transportation fuel supplier, according to the company, with a network of approximately 1,900 company-owned or -affiliated sites, including more than 500 Star Mart-brand locations.
In November, Laval, Quebec-based Couche-Tard made an unsolicited bid of $5.8 billion to buy all of Sydney-based Caltex Australia, which rejected the bid. Its board said the offer “undervalues the company and does not represent compelling value for Caltex’s shareholders.” Couche-Tard in early February raised its bid to $5.93 billion. In February, Blackburn, U.K.-based global fuel and convenience retailer EG Group Ltd. made a $2.6 billion cash bid for Caltex Australia’s convenience-store network, also offering shareholders a 10% stake in a new entity, Ampol, consisting of Caltex Australia’s fuel and infrastructure business. The Caltex Australia board has concluded that the EG Group proposal also undervalues the company.
Couche-Tard said its due diligence has confirmed that Caltex Australia would be a strong strategic fit for Couche-Tard and an important component of its Asia Pacific expansion strategy. There are significant opportunities to be realized from combining both businesses and Couche-Tard remains highly interested in formalizing a transaction, the company said.
“We remain convinced of the long-term financial and strategic merits of an acquisition of Caltex and all the benefits it would offer to the shareholders of both companies,” said Brian Hannasch, president and CEO of Couche-Tard. “Despite the COVID-19 situation, we have worked to complete due diligence on schedule through a significant investment of time and money. Our current plan would be to reengage the process once there is sufficient clarity as to the global outlook, and the work done to date should mean that we will be able to quickly formalize our proposal at that time.”
In dropping the bid, however, Hannasch also said that “Couche-Tard is focused on managing its own business through this period and prioritizing the health, safety and well-being of its employees, customers and the communities it serves.”
- Couche-Tard is No. 2 on the Top 40 update to CSP’s 2019 Top 202 ranking of U.S. c-store chains by number of retail outlets.CSP will release the complete 2020 list in June.
Laval, Quebec-based Couche-Tard’s network consists of about 9,900 c-stores in North America in 48 U.S. states, mostly under the Circle K and Holiday Stationstores banners, and all 10 provinces in Canada, under the Circle K and Couche-Tard banners. In Europe, Couche-Tard operates a retail network in Scandinavia, Ireland, Poland, the Baltics and Russia with approximately 2,700 stores. Also, licensees operate about 2,400 stores under the Circle K banner in 16 other countries and territories (Cambodia, China, Costa Rica, Egypt, Guam, Honduras, Hong Kong, Indonesia, Jamaica, Macau, Mexico, Mongolia, New Zealand, Saudi Arabia, the United Arab Emirates and Vietnam), which brings its worldwide total network to more than 14,800 stores.
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