{"id":4228,"date":"2025-07-18T01:26:06","date_gmt":"2025-07-18T01:26:06","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/4228\/"},"modified":"2025-07-18T01:26:06","modified_gmt":"2025-07-18T01:26:06","slug":"couche-tard-shows-institutional-investors-will-back-big-dreams","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/4228\/","title":{"rendered":"Couche-Tard shows institutional investors will back big dreams"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Couche-Tard founder Alain Bouchard and CEO Alex Miller at a press conference in Tokyo in March on their bid to buy Seven & i. The company has withdrawn its takeover offer, but the saga shows banks and other institutional investors will support big ideas, Andrew Willis writes.Kim Kyung-Hoon\/Reuters<\/p>\n

This will be of cold comfort to Alimentation Couche-Tard Inc. ATD-T<\/a> founder Alain Bouchard, but the Quebec entrepreneur has shown domestic chief executives with global ambitions that they can count on support from Canada\u2019s banks and institutional investors. <\/p>\n

Late Wednesday, Mr. Bouchard, aged 76, walked away from the deal that would have capped an incredible career by abandoning a US$46-billion bid<\/a> for 7-Eleven parent Seven & i Holdings Co. Over a near year-long courtship, Tokyo-based Seven & i refused to engage in a meaningful manner. <\/p>\n

Mr. Bouchard, Couche-Tard\u2019s executive chair, and CEO Alex Miller did the sensible thing by pulling the bid. Even if it meant giving up on a story that started with a single outlet in Laval in 1980 and would have ended with the world\u2019s largest convenience store chain. <\/p>\n

For Canadian CEOs and boards facing the defining challenge of how to break out of the relatively small domestic market onto a world stage, Mr. Bouchard is a role model, even if he couldn\u2019t close the Seven & i takeover. <\/p>\n

Every domestic company\u2019s default expansion strategy \u2013 moving south into U.S. markets \u2013 is now subject to the whims of a protectionist president. So Canadian CEOs know they can find support if they want to emulate Couche-Tard\u2019s expansion into Asia, Seven & i\u2019s core market, or Europe, where the chain used previous acquisitions to become a dominant player. <\/p>\n

To make its audacious bid for Seven & i and satisfy securities regulations, Couche-Tard had to put together what is known as a \u201cfully financed\u201d offer. The retailer needed to line up banks willing to loan tens of billions, along with potential buyers for billions of dollars worth of its stock. <\/p>\n

If Couche-Tard had been successful, it would have tapped domestic institutions for the largest debt and equity financing the country has ever seen. (Couche-Tard stock price popped up by 7 per cent on Thursday when it become clear it wouldn\u2019t be flooding the market with shares to pay for the acquisition.)<\/p>\n

Banks would have put Couche-Tard through the ringer to win these loans. While the company has traditionally been quick to pay back debt shouldered during acquisitions, buying Seven & i would have meant moving into new markets during a period of economic uncertainty. <\/p>\n

Domestic pension plans and other institutional investors would have been equally skeptical about loading up on Couche-Tard stock, on concerns it would fall short on cost-cutting goals and profitability targets at a Seven & i chain that has underperformed for years. <\/p>\n

There is a reason Montreal fund managers Daniel Brosseau and Peter Letko have been banging the drum<\/a> for increased investment in Canadian companies by domestic pension plans. With a whole world of stocks to choose from, the Maple 8 fund managers typically find better risk-adjusted returns from companies outside our borders. <\/p>\n

Mr. Bouchard and Mr. Miller overcame all those headwinds. Couche-Tard had all the money it needed lined up when its team sat across the table from stone-faced Seven & i executives. <\/p>\n

Goldman Sachs Group Inc., Royal Bank of Canada and Bank of Nova Scotia signed letters <\/a>stating they were \u201chighly confident\u201d Couche-Tard could borrow as much as it needed. Approvals for those loans would have gone to the lenders\u2019 boards. <\/p>\n

When it came to raising equity, Caisse de D\u00e9p\u00f4t et Placement du Qu\u00e9bec executives made it clear they were in Couche-Tard\u2019s corner, as the lead investor in a massive stock offering. <\/p>\n

Domestic institutional investors have stepped up in the past to back local heroes striving to be global champions, and been rewarded for their faith. <\/p>\n

In 2020, a consortium of pension plans \u2013 the Caisse, the Canada Pension Plan Investment Board and Ontario Teachers\u2019 Pension Plan Board \u2013 committed $3.2-billion to fund a portion of insurer Intact Financial Corp.\u2019s $12.3-billion takeover of British rival RSA Insurance Group PLC. Intact stock has more than doubled since the acquisition. <\/p>\n

Bank and pension fund commitments to Couche-Tard\u2019s bold strategy means domestic CEOs and boards can take their ambitions to a new level. Market leaders in most sectors \u2013 energy, mining, telecom, retail, finance \u2013 can count on matching the US$46-billion package pulled together by the country\u2019s largest corner store owner. <\/p>\n

Mr. Bouchard fell just short of his goal of building the world\u2019s biggest convenience store chain, for now. The Couche-Tard leader\u2019s ability to finance his vision shows the rest of corporate Canada there are banks and pension plans willing to back big dreams. <\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Couche-Tard founder Alain Bouchard and CEO Alex Miller at a press conference in…\n","protected":false},"author":2,"featured_media":4229,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-4228","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/4228","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=4228"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/4228\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/4229"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=4228"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=4228"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=4228"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}