Alimentation Couche-Tard (Symbol ATD, was ATD.B)

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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by Peculiar_Investor »

Another take on the issue of sustainability of the business from none other than Warren Buffett. From Berkshire Hathaway Acquires Stake in Truck Stop Chain Pilot Flying J - Bloomberg
Warren Buffett wrote:Buffett said by phone he isn’t going to lose sleep over potential threats from autonomous vehicles.

“Trucks are going to be around for a very long time. Who knows when driverless trucks are going to come along and what level of penetration they have,” Buffett said in an interview. “There is nothing that we own that doesn’t have something in the future that might affect it.”
I would suggest the same logic applies to Couche-Tard's business model.
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by AltaRed »

Metro's block is offered at a substantial discount - $57.17
Alimentation's buyback http://www.stockwatch.com/News/Item.asp ... D&region=C
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by Peculiar_Investor »

Yet ATD.b opened today at $59.37 :o I guess certainty over what Metro is doing with their holding trumps the price that Metro received.
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by AltaRed »

Indeed, i noticed and came to the same conclusion as you. I had in a stink bid for some shares just in case it dropped to the $56 range, just in case. I can now toss that one out. I still think the Metro price will keep a lid on valuations for awhile as the market absorbs the Metro holding.

Added: Today's market price may be partially affected positively by Alimentation's buyback of circa 4.4 million shares for cancellation and about 11.4 million shares are being bought by the Caisse. Only about 11.4 million shares are being sold via underwriters... and Metro is retaining about 5 million shares. The market may be relieved not all 32 million shares are flooding the trading market looking for a home.
Last edited by AltaRed on 12 Oct 2017 12:58, edited 1 time in total.
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by Dudsy »

I was allocated only 50% of the shares I requested last night through RBC in the broker offering. The issue was either well subscribed or I'm not a very favoured client. I suspect it was a little of both.
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by AltaRed »

Now into the sub-$56 range for those that are interested.....
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

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Canopy, Couche-Tard team up to sell recreational cannabis in Ontario

https://www.theglobeandmail.com/cannabi ... n-ontario/
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by AltaRed »

2 for 1 share split starts trading on a post-split basis on Monday.
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by Peculiar_Investor »

It appears they've got another big acquisition target in mind, Couche-Tard Responds to Caltex Australia Announcement
LAVAL, QC, Nov. 26, 2019 /PRNewswire/ - Alimentation Couche-Tard Inc. (TSX:ATD.A) (TSX:ATD.B) (ACT) notes the announcement by Caltex Australia Limited (ASX:CTX) (Caltex) that ACT has made a confidential non-binding indicative proposal to the Board of Caltex for the acquisition of 100% of Caltex by way of scheme of arrangement at a cash price of A$34.50 per ordinary share in Caltex (the Proposal) which reflects an enterprise value for Caltex of approximately A$10bn.

The Proposal was made on 18 November 2019 and follows an earlier proposal on 11 October 2019.
Couche Tard is scheduled to release Q2 results today and have a conference call tomorrow (Alimentation Couche-Tard to Release its Second Quarter Results for Fiscal Year 2020 on November 26, 2019).

I don't know if this will impact their schedule. Couche-Tard stock price was up strongly yesterday (3.5%) so maybe news of this became more widely known?
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by AltaRed »

It would take a large secondary offering to pull this off, albeit they had been building cash, and at an issue price definitely below where it's at now. CalTex used to be a 50/50 Chevron Texaco organization and then fully Chevron after their buyout of Texaco, but I see that Chevron had only owned 50% of Caltex Australia until 2015 and then it became fully owned by the open market in Aussie land.

Don't think it would change schedule for quarterly results since that is backward looking, but it would obviously change some comments on Outlook. :wink:

Added: The G&M is reporting a full cash offer worth USD$5.8B
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by CROCKD »

Caltex is trying to spinoff a significant portion of its retail locations into a property investment trust according to business pages in the Australian newspapers. These are apparently attractive locations where the land could be redeveloped into mid and high rise residential buildings.

However Couche Tard's offer is for the whole company according to this report
Canadian convenience store giant Couche-Tard makes $5.8-billion takeover bid for Australia’s Caltex
Couche-Tard later confirmed it made an offer, noting it remains subject to various conditions including Caltex not moving forward with its planned property IPO or any other transactions.
Edit: The G & M report was referred to by AR in the previous post.
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

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A further article on Couche-Tard's offer for Caltex Australia in today's G & M.
Behind the paywall
Couche-Tard’s Asia-Pacific gambit: A ‘messy’ $5.8-billion bid for Caltex
keep what it really wants, which is Caltex’s underperforming convenience store business.
What makes it messy are the non retail assets
Caltex has a network of businesses across Australia and New Zealand, including the Lytton crude oil refinery in Brisbane, fuel import terminals, 94 storage and distribution hubs, and some 300 kilometres of pipelines, according to its most recent annual report. It also has a network of 800 retail stores directly under its control that sell gasoline, food and other items.
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

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Opinion piece from a business columnist in the Melbourne Age. All dollar prices and amounts in Australian Dollars 1$ A ca 0.90 C

Caltex shareholders put heat on suitor to extract higher offer
It is considered likely that Couche-Tard, which is in the convenience store business, would have a plan to sell other parts of Caltex’s business such as refineries, in which it has no expertise.
Couche-Tard’s appetite to improve the price of the offer will largely depend on whether it has plans already in place to carve up the company.
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

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" A verbal contract isn't worth the paper it is written on " Samuel Goldwyn
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by Peculiar_Investor »

There has been a development. Per Alimentation Couche-Tard provides update on offer to acquire Caltex Australia
Company press release wrote:LAVAL, QC, April 19, 2020 /PRNewswire/ - Alimentation Couche-Tard Inc. ("Couche-Tard" or the "Company") (TSX: ATD.A) (TSX: ATD.B) today provided the following update with regards to its proposal to acquire Caltex Australia Limited (ASX: CTX) ("Caltex").

As a result of the committed efforts that teams at both companies have made, Couche-Tard would like to confirm that due diligence for the proposed transaction has been substantially completed. The Company's work confirms that Caltex is 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.

However, the current situation in the world is highly uncertain. The COVID-19 crisis is first and foremost a human tragedy that has impacted millions of people and has also been meaningfully disruptive to economies and businesses around the world, including the Australian fuel and convenience retail industries. Moreover, 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.

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.

Brian Hannasch, President and Chief Executive Officer of Couche-Tard, 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. 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 re-engage 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."
Bottom line, due diligence is completed and they'd like to go forward, but with the COVID-19 situation Couche-Tard will not make a revised proposal at this time, but they remain interested and ready.
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by Peculiar_Investor »

Rather than just posting a naked link it is generally the custom here on FWF to expand on why the article is important or what information in the article you found might be interesting to other FWF'ers.

As a shareholder I know they've released Alimentation Couche-Tard Announces Its Results for Its Fourth Quarter and Fiscal Year 2020 but I haven't had a chance to review it or update my analysis. From a quick glance at the headlines portion there doesn't seem to be any significant surprises.
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by Peculiar_Investor »

Interesting news out tonight Alimentation Couche-Tard confirms it has initiated discussions with Carrefour
Press release wrote:LAVAL, QC, Jan. 12, 2021 /CNW Telbec/ - Alimentation Couche-Tard Inc. ("Couche-Tard" or the "Company") (TSX: ATD.A) (TSX: ATD.B) confirms it has initiated exploratory discussions with Carrefour SA (Paris: CA) regarding a potential friendly transaction, the terms of which are still subject to discussion. There can be no certainty at this stage that these exploratory discussions will result in any agreement or transaction. Couche-Tard will keep the public informed of any material developments in this respect if and when it is legally required or otherwise appropriate for the Company to do so.
According to Couche-Tard said to explore purchase of Carrefour - BNN Bloomberg
BNN Bloomberg wrote:Shares of Carrefour have risen 10% in Paris trading this year, giving the company a market capitalization of 12.6 billion euros (US$15.4 billion) at Tuesday’s close. Couche-Tard shares slipped 2.2% after the Bloomberg News report, closing at $41.31 in Toronto to value the company at almost $46 billion (US$36 billion).
It should be interesting to see what happens with Couche-Tard's share price over the coming days as the market digests this news.
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by AltaRed »

It is off over 8% since mid-December. I'd expect it to drop some more given the size of the potential transaction and the machinations of regulatory approvals in the EU. The stock has been fairly range bound for 2 years, other than the March swoon. It has been a decent holding though....
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by Gosso »

BNN video: Couche-Tard exploring takeover of Carrefour

Down 10% today, anyone buying the dip?

Seems like the market is wondering why Couche-Tard would move away from high-margin convenience stores. Does Couche-Tard see future problems with their business and declining fuel sales? Apparently Carrefour has 7,200 convenience stores, perhaps Couch-Tard is mostly interested in poaching off those assets...
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by like_to_retire »

With such a teeny dividend, I do expect growth from ATD. This move would certainly increase their international exposure.

I don't know if the move warrants such a drop in share price, maybe I should add more - who knows. Carrefour sure is a big company compared to ATD.

Carrefour has 12,500 stores in 30 countries (Europe, Latin America, Asia) with 7,200 convenience stores, so it isn't as if ATD is getting all groceries with Carrefour.

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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by Peculiar_Investor »

I'm a longtime shareholder. Couche-Tard has shown extensive, skilled experience in the mergers and acquisitions space.

I have faith in the management team. They've been disciplined in their approach. They have walked away from previous targets if the price (or other terms) wasn't right as shown here or Couche-Tard lets bid for Casey's expire | National Post from 2010.

My viewpoint is the market was caught off-guard by this deal and is questioning the size of the target.

From Couche-Tard makes play for French grocer Carrefour - The Globe and Mail (For subscribers, i.e. paywalled)
Nicolas Van Praet wrote:“This would be a fixer-upper acquisition” for Couche-Tard, said Brian Madden, senior vice-president and portfolio manager with Toronto-based Goodreid Investment Counsel, which holds Couche-Tard shares among $350-million in assets under management. “Carrefour has been struggling for twenty years, and has never eclipsed its stock price high from the turn of the century. If Couche-Tard were to acquire the convenience stores on favourable terms though, I think the market would welcome the transaction.”
Whether or not the dip is worth buying that is left as an exercise for the reader. I've got a full position so have no plans to either buy nor sell at this time.
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by Profit not Prophet »

The video notes that retail channels are changing and blurring.

A TD note says 'We downgraded Couche-Tard last week on expectations that valuation will remain below average as fund-flows continue to favour cyclical and interest-sensitive sectors' also 'Venturing into an adjacent retail segment....Management has an extensive track-record of making astute acquisitions; so we would like to give it the benefit of doubt; but without some convincing arguments, we struggle to see the strategic rationale.'

So do you have faith in your hired help? They have made me a equal to at least a Civic+ so I can have patience. 10% seems a bit big. I try to plan like Spock and not speculate :) but you might have fun with 100 shares and win or lose small time.
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by AltaRed »

It looks like the deal is dead given French paranoia about foreign control of an important (to them) company. May be blessing in disguise?
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Re: Alimentation Couche-Tard (Symbol-ATD.B)

Post by Shakespeare »

AltaRed wrote: 15 Jan 2021 22:49 It looks like the deal is dead given French paranoia about foreign control of an important (to them) company.
How ironic.
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