* EPS $0.56 vs year-earlier $0.47
* Ups quarterly dividend to C$0.05/shr
* Announces share repurchase program
* Continues to eye acquisitions in 2011
(Updates with conference call, stock price. In U.S. dollars
By Solarina Ho
TORONTO, Nov 23 Canada's Alimentation
Couche-Tard (ATDb.TO) said on Tuesday it will seek new
opportunities to expand its convenience store network,
undeterred by the collapse of its $2 billion bid for a U.S.
competitor this fall.
The company, Canada's largest convenience store operator,
restated its determination to grow through acquisitions as it
posted a stronger-than-expected increase in quarterly earnings
and raised its dividend by 25 percent. Its shares rose more
than 3 percent.
"The dividend increase was a nice surprise," said Derek
Dley, an analyst with Canaccord Genuity, who added that given
Couche-Tard's healthy balance sheet, it will likely put some of
the cash to use to make acquisitions.
During its second quarter, ended Oct. 10, Couche-Tard
acquired 25 stores in five separate deals, with most of the
outlets located in central Indiana and the Mobile, Alabama,
area. The Montreal-based company now operates more than 5,800
stores under banners including Mac's and Circle K.
"I think at some point they're going to look for something
a little bigger," Dley said. "I don't know if they're going to
be able to find anything of the same magnitude as Casey's
Earlier this year Couche-Tard was embroiled in a hostile
attempt to take over Casey's General Stores (CASY.O), which
repeatedly rejected its offer. Eventually industry leader
7-Eleven made a counteroffer that trumped Couche-Tard's,
leading the Canadian company to abandon its bid. Casey's talks
with 7-Eleven eventually ended without a deal.
"Casey's really made it quite difficult for Couche-Tard or
for anyone -- for 7-Eleven or whoever else -- to acquire
Casey's. Obviously it wants to stay on its own. I think
Couche-Tard recognizes this. That said, I do think it was an
asset Couche-Tard really wanted."
Whether Couche-Tard will try for Casey's again remains
uncertain. In the past, analysts have frequently noted that
successful hostile takeovers are rare in Iowa, where Casey's is
incorporated, due to state laws that favor the target company.
"Although we decided not to pursue our offer on the
acquisition of Casey's, we continue our growth efforts," Chief
Executive Alain Bouchard told analysts during a webcast. He
said, however, that the acquisition environment in the United
States is quiet.
"We are looking at other opportunities that may prove to be
interesting ... Acquisition is one way for us to create value.
But our focus on sales, margins and efficiency is also part of
For Couche-Tard's second quarter, net earnings rose to
$105.6 million, or 56 cents a share, from $88.2 million, or 47
cents, in the year-before quarter.
It attributed the increase to higher merchandise and
service sales, bigger gasoline margins and a stronger Canadian
dollar, among other factors.
"It's done a great job of growing its margins over the last
couple of years and we continue to see that again here this
quarter," Dley said.
Total revenue for the quarter rose 10.5 percent to $4.2
billion. Same-store merchandise sales were up 4.9 percent in
the United States and 1.6 percent in Canada.
The company raised its quarterly dividend to 5 Canadian
cents a share from 4 Canadian cents and said it will repurchase
up to 2.69 million class A multiple voting shares and up to
11.6 million class B subordinate voting shares.
Couche-Tard shares closed up 68 Canadian cents, or 2.7
percent, at C$25.95 on the Toronto Stock Exchange after hitting
a high of C$26.22.
(Editing by Peter Galloway)