BUSINESS

Metro selling almost half of Alimentation Couche-Tard investment for $479 million

01/22/2013 04:57 EST | Updated 03/24/2013 05:12 EDT
MONTREAL - Supermarket chain Metro Inc. is selling nearly half of its 25-year investment in convenience store operator Alimentation Couche-Tard to three Canadian banks for $479 million.

The Montreal-based company announced Tuesday that it has agreed to sell 10 million Class B subordinate voting shares to BMO Nesbitt Burns, National Bank Financial and TD Securities for $47.90 per share.

The sale to be completed within three days represents about 7.2 per cent of Couche-Tard's (TSX:ATD.B) outstanding B shares, which closed down 30 cents to $48.98 in Tuesday trading.

Metro will convert nearly 4.3 million of its Class A multiple voting shares into B shares. The remaining 5.7 million B shares are already held by the supermarket retailer.

The sale will allow the company to monetize about 48.2 per cent of its approximately $1 billion investment in Canada's largest convenience store chain. Couche-Tard is also one of the leading operators in the United States and the Nordic region of Europe.

Following the sale, Metro (TSX:MRU) will own 10.7 million Class A shares, representing 21.8 per cent of all issued A shares, an economic interest of approximately 5.7 per cent and a 17 per cent voting interest.

Metro CEO Eric La Fleche said the company is "extremely pleased" with the performance of Couche-Tard but decided to sell a portion of its investment because of the market value of the investment relative to its own total value.

"We still retain a significant economic and voting interest in Couche-Tard, and look forward to the continued growth of our investment," he stated.

La Fleche said Metro is evaluating how to use the proceeds, including growth investments and returns to shareholders.

With annual sales exceeding $12 billion and more than 65,000 employees, Metro is a leader in the food and pharmaceutical sectors in Quebec and Ontario, where it operates more than 600 food stores under several banners including Metro, Metro Plus, Super C and Food Basics, as well as over 250 drugstores under the Brunet, The Pharmacy and Drug Basics banners.

On the Toronto Stock Exchange, Metro's shares lost 18 cents at $62.70 in Tuesday trading.