Couche-Tard eyes Canadian pension funds for equity support in its bid to acquire Seven & i Holdings
Alimentation Couche-Tard Inc. is actively seeking support from some of Canada’s largest pension funds for its proposed acquisition of Seven & i Holdings Co., the owner of 7-Eleven, as reported by BNN Bloomberg.
The company has reached out to major funds like Caisse de Dépôt et Placement du Québec, Canada Pension Plan Investment Board, and Ontario Teachers’ Pension Plan to explore their interest in providing equity.
These sources indicate that Couche-Tard aims to raise several billion dollars through these co-investors.
To fund the acquisition, Couche-Tard is considering various financing options, including debt financing, and issuing stock. However, discussions with the Canadian pension funds are still ongoing, and no final agreements have been made.
Following Bloomberg's report on Couche-Tard's approach to these pension funds, the company’s shares fell by 1.5 percent on Thursday in Toronto.
Recently, Couche-Tard made a preliminary non-binding proposal to purchase Seven & i, which operates more than 85,000 stores worldwide. This potential deal, valued at approximately $38bn, would be the largest-ever foreign takeover of a Japanese company.
Couche-Tard itself operates about 16,700 stores and is valued at around $55bn.
In the broader context, top pension funds and sovereign wealth investors have increasingly played significant roles in financing large transactions. For example, PAI Partners is working to involve Abu Dhabi Investment Authority and Singapore’s GIC Pte in its bid for Sanofi SA’s consumer health division.
Additionally, ADIA recently collaborated with investors, including CVC Capital Partners Plc, in a deal to take Hargreaves Lansdown Plc private for about £5.4bn (US$7.1bn).
Within Canada, CDPQ, which manages $452bn for public pensions and other accounts, often supports Quebec-based companies in their acquisitions by providing equity.
Recently, CDPQ committed to purchasing shares in WSP Global Inc. and National Bank of Canada to help finance their significant acquisitions.
Sources familiar with the situation confirm this development.
