Couche-Tard Share Buyback 2025 Resumes After Dropped $46B Deal

Sarah Patel
3 Min Read
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In a decisive pivot that signals confidence in its core business model, Alimentation Couche-Tard announced Monday the resumption of its previously suspended share repurchase program following the abandonment of its ambitious $46 billion bid for Japanese retail giant Seven & i Holdings.

The Quebec-based convenience store operator, which owns the Circle K brand across North America, confirmed plans to reactivate its $4 billion share buyback initiative that had been temporarily shelved during the acquisition pursuit. Trading on the Toronto Stock Exchange responded favorably, with Couche-Tard shares climbing 3.2% to CAD $87.45 by midday.

“This return to our buyback program represents our unwavering confidence in Couche-Tard’s intrinsic value and long-term growth strategy,” said Brian Hannasch, President and CEO. “While we explored the Seven & i opportunity thoroughly, we remain disciplined in our approach to capital allocation and will not pursue deals that don’t align with shareholder value creation.”

The company’s withdrawal from the Seven & i negotiations came after multiple rejected offers, with the final bid reportedly reaching ¥7,000 per share – a 38% premium over Seven & i’s trading price before acquisition rumors surfaced. According to sources familiar with the negotiations, the Japanese retail conglomerate’s management remained steadfast in their resistance despite the considerable premium.

Industry analysts view Couche-Tard’s decision as strategically sound. “The company has demonstrated remarkable fiscal discipline,” notes retail analyst Maria Sanchez at RBC Capital Markets. “Walking away from a deal that couldn’t be secured at reasonable terms while immediately returning to shareholder value enhancement shows management’s commitment to responsible growth.”

The resumed buyback program aligns with Couche-Tard’s historical approach to capital allocation. Since 2013, the company has repurchased approximately $12.3 billion in shares while maintaining aggressive global expansion, adding over 7,800 stores across 29 countries.

This development comes amid a challenging landscape for convenience retailers globally, with inflationary pressures and changing consumer behaviors reshaping the industry. Couche-Tard has outperformed many competitors through operational excellence and strategic acquisitions, growing annual revenues to $82.4 billion in fiscal 2024.

Financial experts anticipate the company will continue pursuing targeted acquisitions while maintaining its buyback initiative. “Couche-Tard’s balance sheet remains exceptionally strong,” said Jean Leblanc, portfolio manager at Desjardins Securities. “With over $3.2 billion in available liquidity and modest leverage ratios, they’re well-positioned for both share repurchases and strategic growth opportunities.”

The company’s next quarterly earnings report, scheduled for early September, will likely provide additional insights into management’s revised growth strategy following the abandoned acquisition attempt. Until then, the share buyback resumption offers a clear signal that Couche-Tard remains committed to delivering shareholder value through multiple avenues.

For more retail industry developments, visit CO24 Business or check CO24 Breaking News for the latest updates across sectors.

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