ATD/B.TO - Alimentation Couche-Tard Inc

[deleuze68]

Just wondering, even if the deal is blocked, doesn't this tarnish the opinion of management? Part of ATB's valuation rests on the trust in management's ability to grow earnings through synergistic acquisitions. I could see this bizarre takeover attempt hanging a cloud over ATB for a while.

[montizzle]

Just wondering, even if the deal is blocked, doesn't this tarnish the opinion of management? Part of ATB's valuation rests on the trust in management's ability to grow earnings through synergistic acquisitions. I could see this bizarre takeover attempt hanging a cloud over ATB for a while.

I think it does remove some management premium to an extent. This is (partially) why we haven't seen a full rebound today, and won't until we get more explanation.

[Xerxes]

I think given their history the market will give the management the benefit of the doubt. The company needs to always look at new opportunities and certainly through M&A that is how ACB has grown. I understand that Carrefour has a grocery aspect to it that is *new*. Now, certain market participants (i.e. tourists) may not want to sit around and go through operational integration of a large M&A nor do they want to stick around when the deal is being consummated.

That is all fine and well for me. As long-term owner, I am paying the annual salary of ACB's management and I trust they will figure it out. I would not be in the stock if I didn't like them. Of course, i can also chose to not add to the stock as the rest of portfolio grows and only add after one gets comfortable, but then you will be paying more.

[KCLarkin]

As expected, the deal is dead:
https://financialpost.com/news/canadas-couche-tard-drops-20-billion-carrefour-takeover-plan-after-opposition-from-france-govt

The management team built their reputations over 40 years, so I give them the benefit of the doubt on this deal.

At the current price, I don't see any premium for future acquisitions or the superior ROE compared to other Canadian consumer staples.

[Spekulatius]

As expected, the deal is dead:
https://financialpost.com/news/canadas-couche-tard-drops-20-billion-carrefour-takeover-plan-after-opposition-from-france-govt

The management team built their reputations over 40 years, so I give them the benefit of the doubt on this deal.

At the current price, I don't see any premium for future acquisitions or the superior ROE compared to other Canadian consumer staples.

I don’t own this and never have, but what is the point of owning AT and then selling the stock when they make an acquisition? AT has grown by acquisitions basically, so this is just what they have been doing for decades. I don’t think the Carrefour acquisition looks obviously dumb either and even if it does, I would try to understand their rationale before making a decision on the stock

I am going to look into this stock a bit more and see if it is a potential long for me.

[Xerxes]

There is no official rational from the company, but as i understand it based on some readings is the following:

In a world 10 years from now, where is there is more and more electrification, they can use the footprint of grocers to their advantage. For instance when you plug in your car to be recharged, that may take half-hour. You can use that time to do some grocery shopping. You cannot really do that with convenience store.

For any interested in Couche Tard a recommended read is the following. You get to know the founder and his upbringing. As a Quebecer i found it to be a great read. You also get a glimpse how the current CEO came to be known.

https://www.amazon.ca/Daring-Succeed-Bouchard-Couche-Tard-Convenience/dp/198800263X/ref=sr_1_2?dchild=1&keywords=couche+tard+bouchard&qid=1610814365&s=books&sr=1-2

Myself, if the price is still down on Monday, I'll be adding.

[Morgan]

I’ll add a plus one for the book. Quite a good read and an impressive entrepreneur.

[Xerxes]

Tomorrow 8 AM EST
Conference call

https://corpo.couche-tard.com/wp-content/uploads/2021/01/2021-01-16-Analyst-Call-Announcement_EN.pdf

I think once the initial reaction is passed, Government of France will see the light of the day but will have lots of 'asks', ... but maybe a year from now !