From the FT Lex blog
Canadians are not super-keen on foreigners buying companies in their backyard. But they sure know how to turn on the charm when shopping abroad.
Take Alimentation Couche-Tard 's recommended 15.9-billion Norwegian Krone ($2.8-billion U.S.) offer for Statoil Fuel & Retail ASA .
Not that the warm Nordic welcome is surprising, given the 53-per-cent premium to the undisturbed share price of the Norwegian gas station forecourt retailer. At least it has a friendlier ring than last year's aborted attempt by the Quebec-based convenience store group to buy Casey's General Stores in the US.
The offer represents an enterprise value of $3.7-billion, or 7.3 times trailing earnings before interest, tax, depreciation, amortization and rent.
Couche-Tard's leverage is bearable, but it is borrowing $3.2-billion to fund the deal.
The Canadian group is present in parts of North America and, under licence, in Asia, and is hell-bent on gaining a foothold in Europe via Statoil's 2,300 outlets in Scandinavia, the Baltic states, Poland and Russia. But the whopping premium and no synergies suggest there would have been cheaper ways for Couche-Tard investors to diversify geographically into European retail.
Statoil, the state-controlled Norwegian oil company that listed the forecourt business in 2010, will bank about 8.6-billion Kroner for its remaining 54-per-cent stake –about 5 Kroner per Statoil share, Investec Securities estimates. The separately listed unit has returned 42 per cent since listing in late 2010.
Further, the deal will all but complete Statoil's exit from downstream operations, letting it focus purely on exploration and production – and delivery on recent drilling successes not yet reflected in its share price.
Given last year's cash outflow after heavy exploration expenditure, the proceeds will come in handy. Peers with high-margin forecourt outlets will watch this northern alliance closely.