Couche-Tard’s share price has hit a soft patch over the past two months, ever since it confirmed it was in discussions to acquire Seven & i Holdings Co., Ltd., the Japanese parent of 7-Eleven
has often rested on the company’s ability to consolidate the world’s fragmented convenience stores and generate savings and efficiencies from a growing network of outlets. Couche-Tard ’s share price has hit a soft patch over the past two months, ever since it confirmed it was in discussions to acquire Seven & i Holdings Co., Ltd., the Japanese parent of 7-Eleven – by far the biggest target in the Laval , Que.-based company’s four-decade history of consolidation.
It has underperformed the Canadian consumer staples sector – mostly a collection of grocers and other essential retailers – by 23 percentage points this year. It is trading close to a one-year low.For starters, its existing convenience stores aren’t exactly brimming with growth. In its most recent quarterly results, released Sept. 4, the company reported year-over-year declining sales in all regions.
What’s more, Couche-Tard so far has revealed few details about its offer for Seven & i Holdings, other than confirming its interest and stating its belief that a combination would generate clear strategic and financial benefits for both companies.Reports this week How Couche-Tard will navigate the largest deal of its long deal-making history, and clear large Japanese regulatory hurdles for a foreign acquisition, are open questions at this point. The stock’s sluggish recent performance suggests investors are waiting for answers.
“We believe it’s unlikely the company will find a significantly better deal than the one Couche-Tard has just put forward,” Mr. Hannan said in a note Wednesday.
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