It has been a while since we last heard about Canadian convenience store chain Alimentation Couche-Tard (TSE:ATD) But it continues to make its play for Seven & i’s 7-Eleven business. And Seven & i is responding accordingly, with plans to replace its CEO. The news did not sit well at Couche-Tard, as shares dropped fractionally in Monday morning’s trading.
Reports noted that Seven & i is responding to the takeover bid by bringing in an entirely new CEO, and the first foreigner to ever hold the slot as well. This came after news emerged that the company’s founding family tried to put together a package that would take it private, and thus, pretty much take it off the firing line in terms of a buyout. But that effort failed, reports noted, and left the company in flux.
Now, Seven & i is looking to pull in a new CEO, specifically, Stephen Hayes Dacus. Dacus would not only be the first foreign CEO of Seven & i, but he would also bring a wealth of experience to the job, having been with several retail operations beforehand. Dacus is also head of the committee that is evaluating Couche-Tard’s bid, which Couche-Tard already improved once.
Blood in the Water
Naturally, once Couche-Tard heard that the privatization effort failed, it stepped up its own efforts to win over interest. In fact, Couche-Tard recently registered a Japanese subsidiary. This would “…create the path to establishing an office in Japan in the future.”
However, Couche-Tard did not offer further details on the arrangement, including just what this office would do, how many people it would employ, or when it would actually start doing something other than exist and provide a face-saving alternative to being bought out by a Canadian company. At last report, Couche-Tard is offering $47 billion for Seven & i, which is likely drawing some attention. Especially after Couche-Tard raised that bid to its current level from its original $38.5 billion.
Is Alimentation Couche-Tard Stock a Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on TSE:ATD stock based on six Buys assigned in the past three months, as indicated by the graphic below. After a 13.31% loss in its share price over the past year, the average TSE:ATD price target of C$88.50 per share implies 23.8% upside potential.
