Canadian convenience store operator Alimentation Couche-Tard Inc. made a new bid to acquire Cumberland Farms Ltd., valuing the company between $7.5 billion and $8 billion, according to the London-based Times. The Quebec-based company has hired Royal Bank of Canada for advice. Couche-Tard and Cumberland have held talks on and off for years. In 2022, the companies exchanged proposals on a deal that would have valued Cumberland at about $16 billion including debt, The Wall Street Journal reported. Cumberland Farms, owned by TDR Capital and billionaire brothers Mohsin and Zuber Issa, filed for an initial public offering in New York earlier this year seeking a valuation of $9 billion. The company, which operated over 3,200 sites in the US and Europe, aimed to raise about $1 billion to repay debt. The Financial Times reported earlier this month that the IPO was delayed amid takeover interest, including from Stonepeak Partners LLP.
Analysts view the potential transaction as strategically sound. RBC Capital Markets analyst Irene Nattel stated a deal at that price would be consistent with Couche-Tard's objective of making disciplined, accretive acquisitions with a focus on the US and European markets. National Bank of Canada analyst Vishal Shreedhar added that Cumberland's higher mix of non-fuel business would be favorable, given a higher and less-volatile margin structure. Couche-Tard, which operates more than 17,200 stores globally, made a deal in July to acquire Poland's Żabka Group SA for $8.7 billion. Żabka executives and private equity owners, including CVC Capital Partners and Partners Group, are backing the offer. It is still not clear what proportion of the remaining shareholders will tender their shares.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing