Couche-Tard's Founders May Lose Control of Company

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Couche-Tard's Founders May Lose Control of Company

09/20/2017
Alimentation Couche-Tard Chairman Alain Bouchard and the company logo
Alimentation Couche-Tard Chairman Alain Bouchard

LAVAL, Quebec — Alimentation Couche-Tard Inc. has been busy growing its retail network across the globe; however, its ownership may come into question within the next few years.

According to The Globe and Mail, Chairman Alain Bouchard expressed some doubts that he and the other three founders would be able to keep control of the company. The four have special stock rights that expire in 2021.

"There aren't a lot of solutions here" to maintain the founders' ownership, Bouchard told news outlet after the annual Couche-Tard shareholders meeting Sept. 19. "We've tried. I'm not optimistic."

Bouchard and co-founders Richard Fortin, Réal Plourde and Jacques D'Amours control Couche-Tard through a special class of multiple voting shares that carry 10 votes each, despite owning about 23 percent of the equity as of mid-2016, according to the report.

Under a sunset clause set in 1995, those special voting rights were set to expire in 2021. That is when D'Amours, the youngest of the founders, will turn 65.

Last year Bouchard proposed extending the founders' control of Couche-Tard beyond that date; however, investors rejected the proposal.

According to the news outlet, the situation remains unresolved. Shareholder rights group Médac calculated it would cost the founders $7.5 billion to repurchase enough shares to regain control of the company in the event their stock loses its supervoting power.

"They've been fantastic owners, great managers of the business, entrepreneurs and great mentors to me. So I would love to see them continue," Brian Hannasch, Couche-Tard chief executive officer, said in an interview Sept. 19. "But the management team's focus is on shareholders. And that's all shareholders."

As of July 23, Laval-based Couche-Tard's network comprised 9,471 convenience stores throughout North America, including 8,129 stores with road transportation fuel dispensing. Its North American network consists of 18 business units, including 14 in the United States covering 42 states and four in Canada covering all 10 provinces.

In addition, through CrossAmerica Partners LP, Couche-Tard supplies road transportation fuel under various brands to more than 1,200 locations in the United States.

In Europe, Couche-Tard operates a broad retail network across Scandinavia, Ireland, Poland, the Baltics and Russia through 10 business units. As of July 23, Couche-Tard's European network comprised 2,754 stores.

In addition, under licensing agreements, more than 1,700 stores are operated under the Circle K banner in 13 other countries and territories.