Skip to main content

The Globe and Mail

Couche-Tard seen as potential buyer for Hess’s retail operations in U.S.

The variety store, Couche-Tard seen in Montreal, November 19, 2013.

christinne muschi The Globe and Mail

Hess Corp. moved Wednesday to spin off or sell its retail network and industry analysts expect Quebec-based Alimentation Couche-Tard Inc. could be a keen buyer for the 1,258 locations.

In a filing with the U.S. securities regulator, the oil company said it will either distribute the business to shareholders in a tax-free spinoff or sell the business.

Hess is the largest owner of convenience stores along the U.S. East Coast with operations in 15 states and Washington, D.C.

Story continues below advertisement

The sale has been eagerly anticipated since the New York-based company announced last year that it would close or sell its refineries and divest its retail business to focus on oil production and exploration.

Analyst Derek Dley of Canaccord Genuity says Couche-Tard can financially support a deal in the $1.5-billion (U.S.) range after reducing its debt from the purchase of Europe's Statoil Fuel and Retail.

He says Hess would be very attractive and help to bolster its presence in the northeast where it operates Circle K stores.

Analyst Peter Sklar of BMO Nesbitt Burns Inc. says Couche-Tard's interest in Hess would be consistent with the consolidation of the North American convenience store industry.

Couche-Tard chief financial officer Raymond Pare declined to comment on whether it would bid for Hess, but said in an e-mail that the company has "the capacity to do any transaction with our strong balance sheet."

Report an error

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨