Alimentation Couche-Tard won't confirm reports it's on verge of acquiring rival

Convenience store chain Alimentation Couche-Tard Inc. said Tuesday it is in talks regarding "possible business transactions" but won't confirm reports it is about to buy Texas-based rival CST Brands.

Earlier Tuesday, the Wall Street Journal, citing sources familiar with the matter, reported a deal between the companies could come this week and be worth at least $3.4 billion US.

Responding at the request of the Toronto Stock Exchange's market surveillance division, Couche-Tard said no formal agreements have been reached.

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"There is no assurance that transactions will result from any of these discussions," the company said. "Should agreements be reached, Couche-Tard will promptly disclose the information as required."

Couche-Tard has about 1,850 convenience stores in Canada, primarily under the Mac's and Couche-Tard banners. It also has more than 6,050 stores in the United States, mainly Circle K and Kangaroo Express outlets.

"We are a growth company," said Couche-Tard spokeswoman Karen Romer. "We are a disciplined acquirer and have many targets going on at any one time but we don't comment on speculation in the media or in the industry."

CST, which is based in San Antonio, has more than 2,000 outlets in Canada and the U.S. It operates the Dépanneur du Coin and Corner Store banners in eastern Canada.

RBC Capital Markets analyst Irene Nattel wrote in a report that she expects any transaction involving Couche-Tard and CST will face Competition Bureau challenges as both companies have outlets in the Ontario and Quebec markets. 

"Nonetheless, an analysis of the potential combination of CST's footprint in Canada and U.S. and that of Couche-Tard remains intriguing," she wrote in a report.

Shares of Couche-Tard rose more than three per cent on the TSX and closed at $62.00, up $1,89.

CST shares rose than six per cent on the New York Stock Exchange, closing at $47.11 US, up $2.79.