(Bloomberg) -- Alimentation Couche-Tard Inc., the convenience store operator that has approached 7-Eleven’s parent company about a deal, said a weaker US economy may improve the prospects for making a large acquisition.
The US “offers significant consolidation opportunities, and the challenging economic landscape is accelerating this trend,” Chief Executive Officer Brian Hannasch said in a statement that accompanied the company’s fiscal first quarter earnings results.
Couche-Tard’s news release made no reference to its interest in Seven & i Holdings Co. The Canadian company confirmed on Aug. 19 it had made a “friendly, non-binding proposal” to the Japanese owner of the 7-Eleven chain. Neither company has disclosed a proposed price.
An agreement for Seven & i, which has a market capitalization of ¥5.7 trillion ($39.7 billion), would be the biggest foreign takeover ever of a Japanese company. But there are still significant barriers to a deal, including Seven & i’s board and shareholders, the Japanese government and antitrust authorities in the US.
7-Eleven has more than 13,000 stores in the US and Canada, while Couche-Tard has more than 9,000 in those countries, according to information on their corporate websites.
Seven & i said last month that a special committee of independent outside directors is reviewing the offer, and hasn’t provided further details since.
Couche-Tard announced a much smaller US deal last month, acquiring 270 convenience stores and gas stations in Pennsylvania, Ohio, West Virginia, Maryland and Indiana from supermarket chain Giant Eagle Inc.
Couche-Tard, which owns Circle K and other chains, earned 83 cents a share on an adjusted basis for the quarter ended July 21, slightly below forecasts for 84 cents in a Bloomberg survey of analysts. Revenue of $18.3 billion was higher than the projected $18.1 billion.
The company’s executives will hold a conference call with analysts Thursday at 8 a.m. New York time. It will be Hannasch’s last as CEO; he’ll retire from that role this week but remain as a special adviser to the company, with a focus on mergers and acquisitions. Chief Operating Officer Alex Miller will succeed him.
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