Canadian grocer Metro Inc. is selling off most of its stake in Alimentation Couche-Tard Inc. to help fund the purchase of pharmacy chain Jean Coutu.
Metro said late Wednesday it struck three separate deals to parcel off the bulk of its 32.3-million-share stake in convenience store operator Couche-Tard, confirming previous plans to sell the asset. On Oct.2, when Metro announced its takeover of Jean Coutu, the stake was worth about $1.84-billion.
The first transaction will see Metro sell 11.37 million shares in Couche-Tard to dealers led by National Bank Financial and BMO Nesbitt Burns Inc. as a block-trade bought-deal at $57.17 a share for proceeds of $650-million. The shares are class-B subordinate voting shares.
The second deal will see Metro sell 11.37 million Couche-Tard shares to pension fund Caisse de dépôt et placement du Québec at a price of $57.17 for proceeds of $650-million. These shares are class-A multiple voting shares, giving the Caisse an additional 7.7-per-cent stake in the supervoting shares of the company. The pension fund's total stake remains below 10 per cent and it will not have board representation, said Caisse spokesman Maxime Chagnon.
Metro has also entered into a private agreement to sell 4.37 million Class B subordinate voting shares to Couche-Tard for cancellation. Those shares are also priced at $57.17.
"This transaction is a unique opportunity for Couche-Tard to repurchase shares at an attractive price," said Couche-Tard chairman Alain Bouchard. Couche-Tard shares closed at $56.90 on Sept. 29, the last trading day before the Metro takeover was announced.
The grocer said it will be left with a stake of 5.1 million multiple-voting shares in Couche-Tard, representing about 3.9 per cent of that share class. It gave no information about its intentions for those shares.
Jean Coutu struck a friendly deal earlier this month to sell its iconic business to Metro. It's a bet that the two companies are better off together amid growing threats from Amazon's e-commerce expansion and other shifting sands in the retailing sector. It came, sources said, after the founding Coutu family concluded that the path to growth was limited within Quebec because of the province's drug reforms, but improved outside Quebec with a partner.