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Couche-Tard Eyeing Another Big Purchase

LAVAL, Quebec -- Alimentation Couche-Tard Inc. is in talks with four convenience-store chains over potential small- and medium-sized acquisitions, and is on the lookout for another major purchase involving up to 2,000 stores, said CEO Alain Bouchard.

A report in The Globe and Mail said that the Laval, Quebec-based operator of 4,845 convenience stores in North America has made four offers on clusters of fewer than 100 outlets and may have something to announce over the coming months. One day after reporting its record sales numbers, Bouchard also said Couche-Tard has the resources to pull off a $1 billion to $1.5 billion deal similar to the $1.1 billion purchase in late 2003 of 2,290 Circle K stores in 16 U.S. states.

"We have a lot of room to maneuver," he said. There are no talks for the moment on a larger acquisition but Couche-Tard is ready to pounce if the right target becomes available, he said. "We know there will be opportunities in the future but we never know when."

Another big acquisition would put Couche-Tard within striking distance or even ahead of North American industry leader 7-Eleven Inc., which has about 5,800 stores across the United States and Canada, and close to 28,000 locations worldwide.

Many observers consider the U.S. convenience-store sector as ripe for consolidation and Couche-Tard is now well-positioned as a major player.

Bouchard has pointed out in the past that the United States remains a highly fragmented market, with no individual player operating more than 10 percent of the estimated 138,200 outlets.

In addition, Bloomberg News reports that the company plans to revamp a third of its stores by April 2006 as it strives to win customers by offering more store-brand items and packaged foods.

The company will convert 400 stores to the new format this year. The outlets will feature wider aisles, sandwiches sold under the company's La Maisonnee brand and Sloche frozen drinks.

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