Breakingviews - Canada’s pump giant tries cheeky French till dash

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Quebec-based Couche-Tard is eyeing supermarket chain Carrefour. There’s little overlap, but supermarkets may offer the $37 billion petrol station operator a hedge against an electric vehicle boom, writes aimeedonnellan:

The logo of France-based food retailer Carrefour is seen on shopping trolleys in Sao Paulo, Brazil July 18, 2017.

The takeover talks were a surprise. On Tuesday evening, the $37 billion Couche-Tard, which operates 14,000 convenience stores and petrol stations mostly in North America, said it was in friendly talks with Europe’s largest retailer, which is famous for hypermarkets, not small outlets. Even at Carrefour’s depressed price, Couche-Tard Chief Executive Brian Hannasch will struggle to pay too big a premium. Assume he offers around 20 euros per share or 16.2 billion euros, as reported by Bloomberg, equal to a 30% premium. Before factoring in any synergies, which are likely to be modest, the petrol station giant would make a 7.4% return on the 23 billion euro outlay including debt by 2022, Breakingviews calculations using Refinitiv forecasts show.

 

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