Alimentation Couche-Tard is seeking backing from some of Canada’s largest pension funds to support its proposed acquisition of 7-Eleven owner Seven & i Holdings Co., people familiar with the matter said.
The retailer is reaching out to funds including Quebec City-based Caisse de Depot et Placement du Quebec; Canada Pension Plan Investment Board, Toronto, which had assets of C$646.8 billion ($472.8 billion) as of June 30; and Toronto-based Ontario Teachers’ Pension Plan, which has C$255.8 billion in assets, to gauge their interest in providing equity, the people said. It’s seeking to raise several billion dollars from such co-investors, according to the people.
Couche-Tard is considering a range of funding options, from debt financing to issuing stock, the people said, asking not to be identified because the information is private. Discussions with the Canadian pension funds are ongoing and no final agreements have been reached.
Shares of Couche-Tard fell 1.5% on Aug. 29 in Toronto, extending declines after Bloomberg reported its approach to pension funds. Representatives for the retailer, CDPQ, CPPIB and OTPP declined to comment.
The companies disclosed last week that Couche-Tard had made a preliminary non-binding proposal to buy Seven & i, which operates more than 85,000 stores across the globe. Any deal to acquire the retailer, which has a market value of about $38 billion, would be the biggest-ever foreign takeover of a Japanese company. Couche-Tard, which operates about 16,700 stores, is worth about $55 billion.
Top pension funds and sovereign wealth investors have been increasingly playing large roles in financing major transactions.
PAI Partners is seeking to rope in Abu Dhabi Investment Authority and Singapore’s GIC to back its offer for French drugmaker Sanofi’s consumer health division, people familiar with the matter have said. ADIA also teamed up with investors including CVC Capital Partners on a transaction to take Hargreaves Lansdown private for about £5.4 billion ($7.1 billion).
In Canada, CDPQ, which had C$452.1 billion in net assets as of June 30, is often involved in providing equity for Quebec-headquartered companies to support their dealmaking. Recently it committed to buying shares of WSP Global and National Bank of Canada to help finance large acquisitions.
