MONTREAL — A potential exit from the retail sale of fuel envisaged by Husky Energy could lead Alimentation Couche-Tard to expand its footprint in Western canada, consider two financial analysts.
This established company in Calgary is undertaking a strategic review that could lead to the sale of its activities related to retail sale as well as a small refinery in Prince George, British Columbia.
Husky Energy operates more than 500 sites, including many service stations as well as distribution centers in bulk in British Columbia and New Brunswick. Its frequent flyer program “myHusky Rewards account approximately 1.6 million members.
The company, which sells fuel to consumers since 1938, wants to focus on its business of energy production in the north-eastern Alberta, the maritime provinces as well as in Asia-Pacific. Husky has also launched a hostile bid, which expires next week – in order to acquire the oil company MEG Energy.
According to Irene Nattel, of RBC capital Markets, as well as Keith Howlett, Desjardins capital Markets, the name of Couche-Tard could find themselves on the list of potential buyers for certain assets.
“The sites belonging to Husky in the West may represent an avenue of growth is interesting in this region,” said the analyst of the co-operative movement, on Wednesday, in a report sent by e-mail.
According to Mr. Howlett, the operator of the quebec convenience stores and service stations could be looking at up to 402 sites, of which 306 are in Western canada – where the company has approximately 300 points of sale, and a further 96 in Ontario.
At the national level, the multinational company based in Laval operates a network of 2183 stores.
“A potential transaction involving certain assets of Husky would fit in the five-year plan of Couche-Tard plans to double its size through a combination of acquisitions and strong performance,” said Ms. Nattel.
Wednesday afternoon, the quebec-based company had not commented on the assumptions made by the two analysts.
In recent years, Couche-Tard has made significant acquisitions to increase their presence on canadian soil, in particular through transactions with Esso and in the framework of the acquisition of us-based CST Brands, which operated sites under the name Ultramar in Canada.
However, Couche-Tard may not be only on the ranks, believes Mr. Howlett, who had spoken of Parkland, Brookfield, Shell Canada, as well as other regional players as well as buyers potentially interested.
For its part, the analyst of RBC capital Markets has estimated that the value of the network surrounding the sale of fuel could be between 650 and $750 million.
“In the end, the evaluation will depend on the quality of the assets involved, and the value of the underlying properties and will reflect probably a premium linked to the scarcity of the assets of British Columbia”, said Ms. Nattel.
Taking into account the refinery in Prince George, a transaction could reach nearly 835 million dollars, said the analyst Jon Morrison of CIBC world Markets.