Canadian food retailer Metro Inc. (MRU.TO: Quote) Tuesday said that it has agreed to sell a portion of its stake in convenience store operator Alimentation Couche-Tard Inc. (ATD-A.TO, ATD-B.TO,ANCUF.PK) for gross proceeds of C$479 million.
Under the deal, Metro will sell approximately 48.2 percent of its stake in Couche-Tard to BMO Nesbitt Burns Inc., National Bank Financial Ltd. and TD Securities Inc. for C$47.90 per share.
A total of 10 million Class B Subordinate Voting Shares of Couche-Tard will be sold by way of a block trade bought-deal. This represents about 7.2 percent of Couche-Tard’s outstanding Class B Subordinate Voting Shares, and approximately 5.3 percent when combined with its Class A Multiple Voting Shares.
The company expects to close the transaction within the next 3 business days. It will be preceded by the conversion of about 4.28 million of Metro’s Class A Multiple Voting Shares of Couche-Tard into Class B Subordinate Voting Shares. The remaining 5.72 million Class B Subordinate Voting Shares are already held as such by Metro.
Metro noted that the transaction allows it to monetize approximately 48.2 percent of its aggregate participation in Couche-Tard shares, valued at about $1 billion prior to the transaction based on the offer Price.
Following this sale of shares, Metro remains the beneficial owner of 10.74 million Class A Multiple Voting Shares, representing 21.8 percent of all Class A Multiple Voting Shares currently issued and outstanding, an economic interest of approximately 5.7 percent and a voting interest of approximately 17.0 percent.
Eric La Flèche, President & CEO of Metro, said, “Metro has been a key shareholder of Couche-Tard since 1987 and we are extremely pleased with the performance of the company. At this time, given the market value of our holding in Couche-Tard relative to Metro’s total value, we decided to monetize a portion of our investment. We still retain a significant economic and voting interest in Couche-Tard, and look forward to the continued growth of our investment.”
The company also said that it is evaluating opportunities for the use of proceeds, including investments for growth and returns to shareholders.
On TSE, Metro shares settled on Tuesday at C$62.70, down C$0.18 or 0.29 percent.
Couche-Tard’s B shares closed Tuesday’s trading at C$48.98, down C$0.30 or 0.61 percent.
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by RTT Staff Writer
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