Alimentation Counche-Tard (ATDBCN: Baa1 / BBB+) Makes offer to 7-11 Parent

Seven & I {3382 JT Equity} has confirmed it received a offer from Couche tard and has set up a committee to review it. Equities have not waited for the outcome, moving +24% in Tokyo. It has a market cap of €35b now at a EV of €52b. This is sizeable for Couche who itself is only a €50b market cap and €63b EV co. Couche had €1.1b in cash against €13b in debt at the end of April.

• Re. Seven & I 80% of its revenue is from overseas convivence stores namely the 7-11 franchise. That is mainly in US revenue (75%) with 25% in Japan. Bottom line EBIT is more evenly split between Domestic/Japan and US/overseas.
• ATD currently is light on Asia. with main exposure in US (63%), Europe (25%) and Canada (12%). Its generally 50/50 split between general merchandise sales at gas stations and fuel revenue. We don't have exact split for seven & I.
• Reminder it issued issuing heavily into CAD/USD & Euro markets to fund its purchase of TotalEnergies' gas stations earlier this year. That was for $3.8b in cash with expected synergies of $187m over next 5yrs. Deals in primary were well covered then.