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No plans to buy a minority stake in China's Sinopec: Couche-Tard says

MONTREAL - Alimentation Couche-Tard Inc. (TAX:ATD.B) says it has no plans to buy a minority stake in China's Sinopec Sales.

In a statement issued Tuesday night, the Quebec-based operator of convenience stores and filling stations in North America, Europe and Asia, denied media reports that it was interested in bidding for a stake in Sinopec.

"A number of media outlets have reported that . . . (Couche-Tard) is among a handful of companies rumoured to be pursuing the acquisition of a minority stake in China's Sinopec," it said.

"Couche-Tard has no plan to invest in the Sinopec placement at this time. Furthermore, should Couche-Tard have material information to communicate, it would be timely circulated through a press release disclosing the news to the market," it said

State-run Sinopec, formerly known as China Petroleum and Chemical Corp., has said it is planning on selling a 30 per cent interest in Sinopec Sales by the end of the year.

Citing unidentified sources, Reuters news agency said Couche-Tard had been approved to join the bidding process for a stake in Sinopec Sales, along with China's Tencent Holdings Ltd., China Life Insurance Co Ltd., ENN Energy Holdings Ltd., Fosun Group, Hopu Investment Management and Affinity Equity Partners.

However, RBC Capital Markets analyst Irene Nattel had said in a note to clients it wouldn't make sense for Couche-Tard since the Quebec company would have little, if any, control over the Chinese company.

"ATD (Couche-Tard) remains active on the acquisition hunt and as a key global player in the consolidating c-store (convenience store) industry, we would expect management to take a close look at potential transactions of all shapes and sizes," she wrote in a note to clients.

However, the potential deal exceeds the amount she believes Couche-Tard has set aside for acquisitions, adding that "a transaction of this magnitude would also likely delay any credit rating upgrade, which the company has been hoping for and working towards."

Couche-Tard has been actively looking for acquisitions as it tries to grow its network of stores internationally.

It currently has more than 6,200 convenience stores and gas stations in North America and more than 2,200 in Europe as well as licensing agreements for 4,600 stores that operate under the banner Circle K banner in Asia and elsewhere.

The Canadian Press


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