Statoil sells gas retail unit for $2.8B

Norway's Statoil ASA Wednesday, April 18, agreed to sell its majority-owned gasoline retail unit to convenience-store operator Alimentation Couche-Tard Inc. for 15.9 billion Norwegian kroner ($2.8 billion).

Statoil will receive Nkr8.6 billion for its 54% stake in the listed Statoil Fuel & Retail ASA, the leading fuel retailer in the Nordic region. Like other energy companies, Statoil is divesting the retail operations to focus on upstream interests. It held an IPO for Statoil Fuel & Retail in October 2010 at a price of Nkr39 per share.

"We believe Alimentation Couche-Tard is a strong industrial buyer and that the price is attractive. The offer, which is recommended by the board and management of Statoil Fuel & Retail, provides a good outcome for all parties," said Statoil CFO Torgrim Reitan in a statement. "For Statoil, it frees up capital, streamlines our portfolio and enables us to further strengthen our focus as a technology focused upstream energy company, in line with our strategy."

Alimentation, of Laval, Quebec, agreed to offer a near-53% premium to Tuesday's closing price, or Nkr53 per share.

Couche-Tard expects a "significant and immediate" boost to net earnings per share from the deal, which takes it into Europe, including the emerging economies of Central and Eastern Europe. The purchase will expand its network from 5,817 to about 8,400 outlets.

"We strongly believe that our all-cash Nkr53 per share proposal is compelling for Statoil Fuel & Retail's shareholders as it offers them the opportunity to realize full and immediate value for their investment. Moving into Scandinavia and Europe is an important step in implementing Couche-Tard's growth strategy," said Couche-Tard President and CEO Alain Bouchard in a statement.

Statoil Fuel & Retail shares rose almost 51% to Nkr52.30 on Wednesday morning in Oslo. Shares in parent Statoil were little changed at Nkr153.60. The parent group has a market value of Nkr489.8 billion.

Couche-Tard, whose market value as at Tuesday's close was C$6.18 billion ($6.25 billion), had revenue of just under $19 billion for the year ended April 24, 2011, and Ebitda of $2.79 billion.

It has been steadily adding locations and in June 2011 it signed an agreement with Exxon Mobil Corp. for 322 stores in South Carolina and a motor fuel supply agreement for another 65 stores.

Statoil Fuel & Retail had 2011 Ebitda of Nkr3.02 billion, down from Nkr3.39 billion in 2010.

The offer, which is conditional on Couche-Tard securing 90% of the stock, is expected to begin by April 23, pending clearance from the Oslo Stock Exchange. A non-solicitation agreement gives the Canadian company the right to match any competing proposal.

To finance the offer Couche-Tard expects to use its existing credit facilities and a new three-year $3.2 billion acquisition facility from its advisers on the deal: National Bank Financial, UBS Ltd., Rabobank NV, Bank of Nova Scotia, HSBC Holdings plc and Bank of Tokyo-Mitsubishi. National Bank of Canada is acting as administrative agent.

Couche-Tard's legal advisers are Davies Ward Phillips & Vineberg LLP, Advokatfirmaet Haavind AS and Eversheds LLP.

ABG Sundal Collier Norge ASA and Merrill Lynch International are advising Statoil Fuel & Retail, and have provided fairness opinions to its board. Advokatfirmaet Thommessen AS is acting as legal adviser to Statoil Fuel & Retail.