Couche-Tard buys U.S. corner store chain The Pantry for $1.7B
Alimentation Couche-Tard Inc. has a friendly deal to buy The Pantry Inc., which will add more than 1,500 locations in 13 southern states to the Quebec-based company's U.S. network of convenience stores and fuel stops.
The deal values The Pantry at US$1.7 billion, with Couche-Tard paying US$36.75 cash per share.
The Pantry's stock closed Wednesday at US$35.52, after rising 23 per cent in one day amid reports of a transaction in the works. The offer is also 39 per cent above the 30-day average share price as of Dec. 16, prior to media reports.
Couche-Tard has one of North America's largest network of convenience stores, operating primarily under the Couche-Tard and Mac's banners in Canada as well as Circle K throughout the United States.
It says The Pantry — which operates primarily under the Kangaroo Express banner — will increase its presence in the Southeastern and Gulf Coast regions of the United States.
"We strongly believe that our all-cash offer is compelling for The Pantry's shareholders as it offers them the opportunity to realize full and immediate value for their investment," said Brian Hannasch, Couche-Tard's resident and CEO.
The deal is being supported by The Pantry's board of directors, as well as Couche-Tard's, but requires approvals by regulators and shareholders of the North Carolina-based company.
"I am very proud of The Pantry employees and what they have accomplished," said president and CEO Dennis Hatchell.
"Their work has clearly been recognized by the marketplace and by Couche-Tard, culminating in this transaction."
"This is an exciting combination of two strong companies that complement each other extremely well. Unlocking the strategic value of these combined firms will benefit the current Pantry shareholders and provide ongoing opportunities for most of our employees."
The company's didn't disclose how many people are employed by The Pantry but Couche-Tard currently has more than 60,000 employees through its North American network. It also operates in northern Europe in several countries including Norway, Sweden, Denmark, Poland and Russia.