* To buy Statoil Fuel in friendly 53 crowns/share deal
* Deal comes less than 2 yrs after failed bid for Casey’s
* To use Norway as bridgehead for further expansion
* Statoil, biggest shareholder, accepts terms
* Bid at 52.5 pct premium; Statoil Fuel shares up 51 pct
(Adds investor quote)
By Balazs Koranyi
OSLO, April 18 (Reuters) – Canadian convenience-store
company Alimentation Couche-Tard Inc has struck a deal
to buy Norwegian company Statoil Fuel and Retail ASA
for 15.9 billion crowns ($2.8 billion) to gain a foothold in
Europe’s top-performing economies.
Couche-Tard, which operates convenience store chains in
Canada and the United States, will pay 53 crowns a share, a 52.5
percent premium, for SFR, Scandinavia’s top gas-station chain
operator.
The deal, which comes less than two years after Couche-Tard
failed in a $2 billion bid to buy U.S. convenience store chain
Casey’s General Stores, will allow the Canadian
retailer to target new markets outside its North American base.
Financed from existing and new credit facilities, the
acquisition will add 2,300 fuel stations to Couche-Tard’s 5,800
stores and gives it a quickly expanding position in the Baltics,
Poland and western Russia. Couche-Tard said the deal would add
to earnings “immediately and significantly”.
“We think because it is in Scandinavia and a lot more stable
(than the rest of Europe) … it is great timing entering the
market, and Europe will eventually solve its financial issues,”
Chief Executive Alain Bouchard told a news conference.
Scandinavia has been relatively calm amid Europe’s economic
struggles, with Norway leading the way as its massive oil sector
insulates it from the rest of the continent.
Norway’s economy is expected to grow 3.25 percent this year,
according to the central bank, compared with a stagnating euro
zone. The rest of the Nordics are also expected to outperform
neighbors to the south.
Couche-Tard, which will maintain SFR as a separate entity,
will use its new subsidiary as the basis for further growth in
Europe as oil companies increasingly separate their upstream,
refining and retail operations.
“We plan to continue the organic growth that is happening at
SFR and soon we will look at the divestments major oil companies
have started to do in other counties … We will use the Oslo
base to manage these,” Bouchard said.
SFR SHARES SURGE
SFR shares rose 51 percent to 52.3 crowns, while shares of
SFR’s biggest shareholder, Statoil, were broadly
unchanged. Shares of C o uche-Tard were up 11 percent at C$38.08
on Wednesday morning on the Toronto Stock Exchange.
Barry Schwartz, vice president and portfolio manager at
Toronto-based Baskin Financial Services, said the big rise in
Couche-Tard’s stock might be overdone. Schwartz, who does not
own Couche-Tard, said he is always nervous when companies go
outside their core competencies.
“It’s not a cheap acquisition for them,” he said, but noted
that Couche-Tard has a track record of growing through
acquisitions, and adapting to new markets. “I wouldn’t bet
against them.”
Statoil, Norway’s top oil producer and the retailer’s 54
percent shareholder, agreed to the sale, and will use its
proceeds from the deal to focus on its core exploration and
production business.
SFR operates the largest fuel retail network in Scandinavia
and has expanded into Russia, Poland and the Baltics. It targets
organic growth of 50 to 60 new stations a year, including 40 to
50 in Central and Eastern Europe, to add to its current network
of 2,300.
COUCHE-TARD TO USE $3.2 BLN CREDIT FACILITY
The deal is conditional on regulatory approvals,
particularly in Russia, Denmark and Poland, and on Couche-Tard’s
acquiring over 90 percent of SFR’s shares.
Couche-Tard said it expects to use existing credit
facilities and a new three-year $3.2 billion credit facility to
finance the offer.
The new credit is committed by a syndicate of banks led by
National Bank Financial, UBS, Rabobank, Scotiabank, HSBC and
Bank of Tokyo-Mitsubishi – which also acted as Couche-Tard’s
financial advisers – with National Bank of Canada acting as
administrative agent.
The offer is set to start no later than April 23. The
initial offer period will be 20 U.S. business days and may be
extended several times.
“We would advise investors to accept Couche-Tard’s bid for
SFR as we believe it represents a fair value for the shares. We
think other bidders are unlikely to emerge with a higher bid,”
said Danske Markets analyst Martin Stenshall in a note to
clients.
Couche-Tard’s legal advisers are Davies Ward Phillips &
Vineberg LLP, Haavind and Eversheds LLP. ABG Sundal Collier
Norge ASA and Merrill Lynch International are acting as
financial advisers to SFR.
($1=5.74 Norwegian krones)
($1=$0.99 Canadian)
(Additional reporting by; Euan Rocha, Claire Sibonney and
Allison Martell in Toronto; Editing by Erica Billingham, David
Holmes, John Wallace and Peter Galloway)
