Canada’s Alimentation Couche-Tard (TSE:ATD) has raised its takeover offer for the 7-Eleven convenience store chain to $47 billion.
The offer for Seven & i Holdings, the company that owns the 7-Eleven chain, is the largest ever for a Japanese company. Couche-Tard, which already runs the Circle-K convenience store chain, has now offered $18.19 per share for Seven & i Holdings. That’s up from a previous bid of $14.86 per share that was rejected by the 7-Eleven owner for being a lowball offer.
Seven & I declared that the new proposal is both non-binding and private. There is a chance that regulators might suddenly get concerned about Couche-Tard losing a competitor and gaining that market share for itself.
Building on a Growth Strategy
The fact that Couche-Tard can lay out that kind of money to buy 7-Eleven to begin with suggests that it has been successful, and that stems from an earlier-established strategy for growth. It set this plan in place last year, known as “10 for the Win.”
The growth plan includes a focus on technology. It also has four key points to measure success, including winning in the business-to-consumer and business-to-business categories. Winning the Customer focuses on loyalty program operations, and Winning Growth will see the company rebuild stores and operations.
Is Couche-Tard a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on TSE:ATD stock based on nine Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 2.81% rally in its share price over the past year, the average TSE:ATD price target of C$87.70 per share implies 19% upside potential.
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