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COUCHE-TARD TO ACQUIRE C-STORE RIVAL SILCORP LTD.

MONTREAL (FNS) -- Quebec's largest convenience-store chain is about to swallow its Ontario-based rival and become one of the Top 10 operators in North America. Alimentation Couche-Tard Inc. here has offered to buy Toronto-based Silcorp Ltd. for $145 million ($220 million Canadian) in cash or about $15 a share, about $3 above the Silcorp share price before the announcement.The combined company would

Brian Dunn

March 22, 1999

2 Min Read
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BRIAN DUNN

MONTREAL (FNS) -- Quebec's largest convenience-store chain is about to swallow its Ontario-based rival and become one of the Top 10 operators in North America. Alimentation Couche-Tard Inc. here has offered to buy Toronto-based Silcorp Ltd. for $145 million ($220 million Canadian) in cash or about $15 a share, about $3 above the Silcorp share price before the announcement.

The combined company would eventually look across the U.S. border for expansion, Couche-Tard's chairman said.

The deal has the support of Silcorp management and would end a hostile takeover bid by Couche-Tard that began two years ago. At the time, Silcorp deemed the $50 million bid inadequate. Silcorp has agreed to pay Couche-Tard $5.9 million if a higher bid comes in and Silcorp merges with that bidder.

The purchase is conditional on two-thirds of Silcorp's shares being redeemed and is expected to close in April. Fidelity Management & Research Co., Boston, is Silcorp's majority shareholder, with approximately 14% of the company's outstanding voting shares.

Couche-Tard operates 634 conventional convenience stores and 307 fueling stations in Quebec, Ontario and western Canada. It made a profit of $5.6 million on sales of $564.3 million last year. Silcorp operates 974 stores and 128 gas bars and last year earned $11.6 million on revenues of $490.2 million.

The merged company would be Canada's first national convenience store chain, with at least 1,600 outlets and 11,500 full- and part-time employees. Alain Bouchard, Couche-Tard chairman, said there will be few job losses or store closings as there is very little overlap between the two chains.

Bouchard said he plans to double the 200 outlets in western Canada over the next three to five years and expects to enter the U.S. market within two years by acquiring small chains, most likely in the Northeast.

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