The Globe and Mail reports in its Thursday edition that Alimentation Couche-Tard is facing an uphill battle with its brazen play for French grocer Carrefour SA after drawing fire from the French government and raising questions about its strategy among surprised investors.
The Globe's Nicolas Van Praet and Tim Kiladze write that hares of Couche-Tard fell 10 per cent Wednesday after the Laval, Que., company said it sent a non-binding offer letter to Carrefour for a friendly combination at a price of 20 euros per Carrefour share. That price values Carrefour at about $20-billion (U.S.) on an equity basis and marks a premium of about 29 per cent to Carrefour's closing price Tuesday.
The deal, if consummated, would be Couche-Tard's largest takeover and one of the largest made by any Canadian company.
Couche-Tard's move has taken the market by surprise and a sharp turn in strategy for the company.
It also raised immediate questions about how receptive France's government will be to the takeover of Carrefour, the country's largest private-sector employer, at a time when jobs are a sensitive subject. The French government has already signalled its opposition, citing concerns about "French food sovereignty."
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