Convenience store giant Alimentation Couche-Tard Inc. has again extended its $2.8-billion (U.S.) tender offer for the retail unit of Norway's Statoil ASA .
The friendly bid that was announced on April 18, a transaction that would catapult North America-centred Couche-Tard into several choice European markets, has been dragging on for almost a month and a half.
Couche-Tard president and chief executive officer Alain Bouchard showed signs of frustration Tuesday about how long it's taking for shareholders to tender to the offer.
Laval, Que.-based Couche-Tard needs 90 per cent of the shares in Statoil Fuel & Retail ASA – the gas bar and convenience store subsidiary of the state-owned petroleum giant Statoil – to be tendered to its bid if it is to go through.
On May 22, when it first extended its bid, Couche-Tard had locked up only about 67 per cent of the shares, including Oslo-based Statoil's 54-per-cent stake.
The company did not provide an update Tuesday on what percentage has been tendered. The offer now expires June 8.
Mr. Bouchard hinted in a news release Tuesday that his company could walk away from the proposed deal, which has the approval of Statoil as well as SFR's board.
"At this stage, we retain all our options, including letting our offer expire, and our shareholders can trust that we will act in their best interests at all times," he said.
"Although this acquisition remains our preferred transaction, we still remain active on other options and time is becoming of the essence."
Hinting that he's not prepared to sweeten the bid, which represents a 53-per-cent premium over the closing price, Mr. Bouchard said "we are standing by our offer level, notwithstanding material falls in global stock market indices and economic uncertainties in Europe since we made our original announcement.
"We understand that certain [SFR]shareholders are either waiting to tender at the last minute to avoid having their shares locked up once tendered or are as yet unclear whether our 53-per-cent premium offer represents full value for their shares," he said.
Another option besides walking away or increasing its offer would be for Couche-Tard to settle for a majority stake of 67 per cent or whatever the final percentage is when the offer expires.
"In our view, those SFR shareholders who have not yet tendered are likely waiting to see if another bidder with a higher all-cash offer will emerge (which appears unlikely to us) or believe that because Couche-Tard shares have risen on expectation of completion of the SFR acquisition, Couche-Tard will increase its offer to assure the closing of the transaction," Desjardins Securities analyst Keith Howlett said in a research note Tuesday.
Mr. Howlett doesn't think Couche-Tard will increase its offer.
The proposed transaction would add SFR's network of about 2,300 outlets to Couche-Tard's 5,800-plus stores in Canada and the United States.
SFR boasts more than a 30-per-cent share of convenience store sales in Norway, Sweden, Denmark, Latvia and Estonia, and it ranks in the top five in Lithuania and Poland.
Couche-Tard operates under the Couche-Tard and Mac's banners in Canada and the Circle K banner in the United States.
The proposed transaction would give Couche-Tard a major platform from which to deploy an expansion strategy in Europe, Mr. Bouchard said when the agreement was announced last month.
Couche-Tard shareholders will be mightily disappointed if the deal falls through, and that could be reflected in a sharp drop in the company's share price to prebid levels.
Shareholders had been told for years to be patient, that another blockbuster deal after the $1.1-billion purchase of the Circle K chain in 2003 would eventually materialize, but that Couche-Tard refused to overpay simply for the sake of growth.