Metro to Sell $1.2 Billion in Couche-Tard Holdings to Fund Jean Coutu Acquisition
MONTREAL, CANADA - Canadian grocer Metro Inc revealed it will be selling off a majority of its stake in Alimentation Couche-Tard Inc. ahead of it’s recently announced $3.6 billion (C$4.5 billion) acquisition of chain Jean Coutu Group. The retailer said it will be using the earnings from the sale, estimated at around $1.20 billion (C$1.5 billion), to fund the Jean Coutu purchase.
Set to be sold in three separate deals, Metro said in a release that in total, around 27,112,000 shares will be sold at approximately $45.80 (C$57.17) a share.
About 11.4 million of the Couche-Tard shares will be sold to dealers led by National Bank Financial Inc. and BMO Capital Markets, as bookrunners, and will raise $520,562,000 (C$650 million). An equal number of shares will be sold to CDP Investissements Inc. et CDPQ Marchés Boursiers Inc., two wholly-owned subsidiaries of Caisse de dépôt et placements du Québec, for the same dollar amount. The third and final deal will see about 4.4 million shares sold back to Couche-Tard for about $200,275,000 (C$250 million).
According to Reuters, Metro is currently the third-biggest food retailer in Canada, which, as we previously reported, is looking to get even larger through its $3.6 billion deal to acquire Jean Coutu. Thomson Reuters data placed this value at 24 times forward earnings when the deal was announced, compared with an industry average of 16, which some analysts believed might be an effort to protect against risks facing the retail sector.
Will this be the start of a bit of a retail revolution in Canada like we’ve been seeing stateside? As Metro’s deal continues to be pushed forward, AndNowUKnow will continue to bring you the details.