Couche-Tard CEO sees speedier timeline in potential deal for 7-Eleven owner

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Alimentation Couche-Tard Inc. executives say the recent process they’ve adopted to try to buy the owner of 7-Eleven has helped negotiations and perhaps even sped things up.

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The Laval, Que.-based convenience store operator, which owns Circle K, signed a non-disclosure agreement with Seven & i Holdings Co. Ltd. in May. It also put together a portfolio of U.S. stores it would consider selling in hopes of appeasing regulators and advancing its goal of acquiring 7-Eleven’s Japanese parent company.

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“I think the benefit of that is it’s setting a timeline to bring clarity to both us … and their special committee, if a transaction is going to be reached,” said CEO Alex Miller.

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“I believe that timeline will be shorter rather than longer.”

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The comments offer a window into the talks between the two convenience store giants, whose relations have swung from acrimonious to more tempered since Couche-Tard made a bid for Seven & i last August.

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Seven & i’s board initially rebuffed Couche-Tard’s offer, causing it to sweeten its bid by 22 per cent to a reported US$47 billion. Still, Seven & i fought the attempt and eventually garnered a buyout proposal from the family that helped found the Japanese firm.

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When that fell through, Couche-Tard and Seven & i started mapping out potential buyers for convenience stores that could be sold to satisfy U.S. antitrust regulators.

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They’ve said little about how things have progressed since, but Miller mentioned Thursday that only a small group at Couche-Tard is involved with the potential acquisition and engaged with management discussions and due diligence.

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“Our focus on mergers and acquisitions, it hasn’t changed,” he said.

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“I would say activity has not been as pronounced in the recent weeks as it had been over the previous months, but we remain active on some things and we will continue to look at those things as we have always done.”

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His comments came a day after Couche-Tard revealed it earned US$442.3 million during the fourth quarter, down from US$454.5 million during the same quarter last year.

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The company, which keeps its books in U.S. dollars, reported net earnings attributable to shareholders came in at US$439.4 million during the quarter, compared to US$453 million during the same period last year.

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Earnings per diluted share for the period ended April 27 reached 46 cents US during the fourth quarter, compared with 47 cents US during the same period last year.

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Revenue came in at US$16.3 billion during the fourth quarter, down 7.5 per cent on an annual basis.

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The quarter encompassed a period of time that was “not overly rosy” but “fairly stable.”

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“This year has been among the more challenging in retail as our consumers are hurting and carefully watching their spending,” Miller said, in what was likely a reference to the tariff dispute and high cost of living.