Alimentation Couche-Tard Inc. today [Thursday] announced that it has filed a bid to acquire the assets of Dairy Mart Convenience Stores, Inc., a leading regional convenience retailing chain with some 450 stores in five Midwestern and Southeastern States, including Ohio, Kentucky, Pennsylvania, Michigan and Indiana.
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Couche-Tard’s bid is for approximately US$80m in cash (subject to adjustments) and the assumption of certain liabilities, mainly lease contracts. The bid covers a substantial majority of Dairy Mart’s stores, including inventory and is also subject to a one-year management contract whereby Couche-Tard will manage any stores that it does not acquire with the intention of eventually selling or closing those stores on behalf of Dairy Mart. This transaction would be Couche-Tard’s second acquisition of importance in the United States, where it has been present in the Midwest since June 2001 and operates a network of 238 stores today. The transaction would add approximately C$700m (US$456.6m) in annual sales.
The bid is conditional on regulatory and legal approvals as Dairy Mart Convenience Stores, Inc. filed voluntary petitions under chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York on 24 September, 2001. The execution of the bid commences the auction process required under Section 363 of the US Bankruptcy Code, in which other interested parties may submit bids for Dairy Mart. Bidding procedures and deadlines will be established by the court. Should Couche-Tard’s bid be retained, it will be subject to various standard procedures for the required approvals and the closing of the transaction, which could take place in the summer of 2002.
“This transaction would give us an excellent opportunity to accelerate our business development with a second large, well-established network in a market where we already have a solid presence. After slightly over a year in the United States, that would bring us closer to our objective of one thousand stores for our first foothold in the U.S. market,” indicated Alain Bouchard, Chairman of the Board, President and Chief Executive Officer of Alimentation Couche-Tard.
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