{"id":526789,"date":"2010-04-13T14:22:00","date_gmt":"2010-04-13T18:22:00","guid":{"rendered":"e2249889-c78b-43e3-9643-b1d7d4aa587b:422466"},"modified":"2010-04-13T14:22:00","modified_gmt":"2010-04-13T18:22:00","slug":"couche-tard-under-review-for-credit-downgrade","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/526789","title":{"rendered":"Couche-Tard under review for credit downgrade"},"content":{"rendered":"

Alimentation Couche-Tard's<\/a> credit rating has been placed under review by Moody's Investor Services following the convenience store's hostile bid for Casey's General Stores Inc.<\/p>\n

"The review for downgrade considers Moody's belief that Casey's would represent a relatively large sized acquisition which has the potential to increase ACT's initial adjusted pro-forma leverage from roughly 3x to over 4x, said the credit rating agency on Monday. <\/p>\n

Couche-Tard said Friday that it has launched an unsolicited US$1.9-billion to take over U.S.-based Casey's. The offer, worth US$36 per share, was rejected
\nby Casey's management, who accused Couche-Tard of "trying to buy
\nU.S. companies on the cheap."<\/p>\n

Shares in Couche-Tard have risen since the bid was made public. Casey's stock, meanwhile, has jumped to US$39.   <\/p>\n

The Moody's review will focus on Couche Tard's plans to finance the potential transaction, including an assessment of its resulting balance sheet, liquidity profile and plans for future debt reduction. <\/p>\n

The Quebec convenience store's rating would likely be downgraded if Moody's concluded that the company's adjusted debt\/ EBITDA moved towards 4x, with cash flow relative to adjusted debt levels in the "low single digits."<\/p>\n

"While ACT has a favorable track record of integrating acquisitions and
\nadditional acquisitions are contemplated for in its current rating, the
\nproposed acquisition of Casey's has the potential to stretch ACT's key
\ncredit measures beyond the bounds that Moody's currently expects," the
\nrating agency said. <\/p>\n

Vishal Shreedhar, an equity analyst at UBS AG, said the Casey proposal marks a strategic departure for Couche Tard, noting in the past that it has acquired assets at low prices with significant opportunity for merchandising improvement. <\/p>\n

"We view CASY\u2019s operations as high quality, with a strong merchandising component," he told clients in a note to clients.  <\/p>\n

"The strategic rationale for this deal: increased scale, entry into new territories, leveraging Casey's strong balance sheet and merger synergies."<\/p>\n

Mr. Shreedhar said the deal could be accretive to Couche Tard, based on purchase price of between US$36 and US$45. <\/p>\n

A successful bid would be paid for in cash, however Couche Tard's management will remain disciplined and not overpay, he wrote. <\/p>\n

David Pett <\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Alimentation Couche-Tard's credit rating has been placed under review by Moody's Investor Services following the convenience store's hostile bid for Casey's General Stores Inc. "The review for downgrade considers Moody's belief that Casey's would represent a relatively large sized acquisition which has the potential to increase ACT's initial adjusted pro-forma leverage from roughly 3x to […]<\/p>\n","protected":false},"author":4060,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-526789","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/526789","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4060"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=526789"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/526789\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=526789"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=526789"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=526789"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}