Alimentation Couche-Tard Inc.’s top executives are in Paris seeking to salvage a US$20 billion bid for Carrefour SA as officials from Canada press the French government to relax its objections to the deal.
Pierre Fitzgibbon, the economy minister in Couche-Tard’s home province of Quebec, said he would speak with French Finance Minister Bruno Le Maire Friday to apply “positive pressure” in favor of the transaction. Fitzgibbon said he would stress the close-knit relationship between the province and France that has facilitated previous deals, including Alstom SA’s purchase of Bombardier Inc.’s rail unit, announced last year.
Couche-Tard “could be a very strategic shareholder that would benefit Carrefour’s operations in France,” Fitzgibbon said to reporters.
The Canadian convenience-store operator plans to pump 3 billion euros (US$3.6 billion) into the French supermarket operator over five years, according to a person familiar with the situation, as part of a set of assurances to the government of President Emmanuel Macron.
Other pledges include preserving jobs for two years, keeping Carrefour’s headquarters in France and maintaining stock listings in France as well as Canada, said the person, who asked not to be identified because the information isn’t public.
Carrefour shares gave up some of this week’s gains after Le Maire said he was prepared to give a “clear and definitive no” to a deal, falling 2.9 per cent to 16.61 euros in Paris. Couche-Tard’s offer is for 20 euros per share; both sides see room for negotiation on the final price, according to people familiar with the situation.
A Carrefour representative didn’t respond to requests for comment.
Le Maire previously cited concerns about a French supermarket chain falling into foreign hands, saying the country needs to maintain domestic control over its food supply. France recently beefed up its authority to block foreign takeovers.
“We have the legal instrument available to us,” Le Maire said Friday. “I’d rather not have to use it, but will if needed.”
The finance ministry is ready to study the proposal once the Canadian side officially presents it, people familiar with the matter said earlier this week. They said Macron’s administration plans to take as long as needed to assess its impact on jobs and the sector.
Despite Le Maire’s strident comments, Couche-Tard Chief Executive Officer Brian Hannasch and other managers are in Paris negotiating with Carrefour’s leadership in an effort to come up with a package that’s palatable to the French company’s shareholders and the government, according to a person familiar with the situation.
Couche-Tard shares were up 5.1 per cent to $38.10 as of 12:47 p.m. Toronto time. Prior to Friday’s gains, they had fallen for eight consecutive days.
In Ottawa, Prime Minister Justin Trudeau hinted that his government is prepared to throw its weight behind the company’s effort. “Our role as a government is always to be there to support Canadian companies including as they look to expand around the world. I know that discussions continue to be ongoing and I won’t make any further comments on that,” he told reporters Friday in Ottawa.
Biggest Employer
Carrefour employs around 100,000 people in France and is the country’s largest private employer, with stores ranging from convenience outlets to giant hypermarkets dotting the landscape.
The company has been implementing a turnaround plan under Chief Executive Officer Alexandre Bompard that involves investments in online shopping and organic food. Analysts point to the absence of geographical overlap between the companies.
The investment plan was reported first by Les Echos, which is owned by Bernard Arnault’s LVMH. Arnault also controls a 5.5 per cent stake in Carrefour.
If Couche-Tard goes ahead with its bid, it would need to submit its plans for screening by the Finance Ministry, which has 30 days to respond to such requests, to which it can add 45 days for a deeper examination. No reply from the government amounts to a refusal. In parallel, or before that, Couche-Tard could start informal negotiations on the commitments it’d be ready to make.
French Revolution
“If Carrefour’s board of directors and reference shareholders see a real strategic interest in the deal and manage to convince the Finance Ministry, the door could open,” said Pascal Bine, Paris-based partner at Skadden, Arps, Slate, Meagher & Flom LLP.
But that’s not a given in a country where riots over the availability of bread set in motion a process that toppled the monarchy in 1789, Bine added.
“Since the COVID crisis, a new paradigm has emerged, aimed at preserving the economic sovereignty of the country, including the supply of essential goods and services,” he said. “If people are not fed, it’s the Revolution.”
–With assistance from Kait Bolongaro and Derek Decloet.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
