October 10, 2024 11:36 GMT
CONSUMER STAPLES: Alimentation Couche-Tard (ATDBCN: Baa1/BBB+) CEO speaking
CONSUMER STAPLES
(headlines with bit of delay);
"*Seven & I CEO Isaka: Will Sincerely Respond to Couche-Tard's Offer"
"*SEVEN & I CEO DECLINES COMMENT ON COUCHE-TARD PROPOSAL, PRICE"
- the expected responses/does not give much away.
- There was something for both sides o/n - poor earnings makes holding back a offer harder (~a higher multiple being offered by ATD and more shareholder protests around current mgmt). Announced spin-off looks clearly defensive and offers shareholder returns from proceeds.
- Equities were not too concerned holding at eqv. $15.6/share. ATD's 'reported' revised offer was ~$18.2/share (bbg).
- We see equities pricing a ~60% chance of closing on that.
€31s may look value for some - you will still likely need to sit through eventual supply (co has tagged $10b in M&A vs. $1.6b in cash on hand). We have less issue on fundamentals; mature market means M&A is a sound approach (alternative cash use could have been equity pay-outs) and co is a seasoned acquirer with results to show.
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