Canadian convenience store operator, Alimentation Couche-Tard Inc. has received approval from the Toronto Stock Exchange to amend its current share repurchase programme.
The move allows the group to increase the maximum number of Class A Multiple Voting Shares that may be repurchased to 46,806,328, representing 5.8% of the corporation's public float as on 19 April 2021.
Share Repurchase Efforts
From April 2021 to January 2022, Alimentation Couche-Tard purchased a total of 26,503,124 shares for cancellation at a weighted average price of US $37.57, for a total cash amount of US $995.7 million.
Consequently, following the amendment and looking back at the January 2022 repurchased amounts, a total of 20,303,204 shares, representing approximately US $800 million based on current market conditions, will remain available for repurchase until 25 April 2022 at the latest.
The group also intends to renew its share repurchase program for 2022-2023 for a number of shares equal to 10% of the then-prevailing public float upon expiry of the current programme.
'Free Cash Flow'
Claude Tessier, CFO of Alimentation Couche-Tard, said, "We are confident in our ability to generate substantial discretionary free cash flow well above our operational needs. Given the strength of our balance sheet, as evidenced by our current leverage ratio of 1.23x, we have the opportunity to increase shareholder value while retaining our financial flexibility and staying true to our disciplined capital allocation."
"Our M&A strategy remains a priority to deploy excess capital and therefore, we preserve the option to reduce or pause share repurchases in the future, should sizeable M&A opportunities become actionable," Tessier added.
In accordance with Toronto Stock Exchange requirements, Couche‑Tard is entitled to repurchase, on any trading day, up to a total of 651,108 shares representing 25% of this average daily trading volume.
The actual number of shares purchased under the programme, the timing of purchases, and the price at which the shares are bought will depend upon management discretion based on factors such as market conditions.
All shares repurchased under the programme are cancelled upon their repurchase.
Couche-Tard operates in 26 countries and territories around the globe, with close to 14,200 stores.
With its Couche-Tard and Circle K banners, it is one of the largest independent convenience store operators in the United States and is a leader in the convenience store industry and fuel retail in Canada, Scandinavia, the Baltics, and Ireland.