Company's CFO said firm has "capacity to do any transaction with our strong balance sheet"
MONTREAL—Hess Corp. has moved to spin off or sell its retail network and industry analysts expect Quebec-based Alimentation Couche-Tard could be a keen buyer for the 1,258 locations.
In a filing with the American securities regulator, the oil company said it will either distribute the business to shareholders in a tax-free spin-off or sell the business.
Hess is the largest owner of convenience stores along the United States east coast, with operations in 15 states and Washington, D.C.
The sale has been eagerly anticipated since the New York-based company announced last year 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 US$1.5-billion 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 Capital Markets 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 email that the company has “the capacity to do any transaction with our strong balance sheet.”