EU CONSUMER STAPLES: Couche-Tard: gives up on 7-Eleven acquisition
(ATDBCN: Baa1/BBB+)
(SVELEV; A2 CW Neg/A CW Neg)
It was a litmus test for what was meant to be more lax M&A guidelines set by the Japanese government but instead will add to ATD's shorter list of failed acquisition attempts (Carrefour on French Gov, Caltex on Covid).
ATD has a never-ending M&A appetite - which it currently has pegged at $10b ($2.3b of cash on hand). It is part of its strategy to take EBITDA from $6b to $10b within three years. For reference above was a circa ~$47b (in equity-value) acquisition - relief for credit on sizeable supply risk fading.
ATD: "you have engaged in a calculated campaign of obfuscation and delay, to the great detriment of 7&i and its shareholders. We believe this approach reinforces our concerns about your approach to governance. Based on this persistent lack of good faith engagement, we are withdrawing our proposal."
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
POLITICAL RISK: Trump Wants 'Real End' To Iran's Nuclear Programme
Jennifer Jacobs at CBS puts two lengthy posts on X after US President Donald Trump left the G7 early. Some of the main points noted below:
- Trump says he needs to be in the White House Situation Room where he can be "well versed" on the state of play in the Middle East. Calls for a "real end" to Iran's nuclear programme with Iran "giving up entirely" on nuclear weapons.
- Says Israel is not slowing its barrage on Iran. Says he may end VP JD Vance or Middle East envoy Steve Witkoff to talk to Iran.
- Says US would "come down so hard if they do anything to our people," re: threats to US bases in Middle East.
- Says he hope Iran's nuclear programme "is wiped out long before [US involvement]."
- Confirms that Treasury Secretary Scott Bessent 'and a couple of others' have stayed behind to meet with G7 leaders.
- Says he has not seen the G7 statement, but has "authoized them go say certain things." Earlier, Trump reversed course and signed a G7 resolution calling for “a broader de-escalation of hostilities in the Middle East, including a ceasefire in Gaza", after initially refusing to back the wording.
At present, neither Israel nor Iran have actively shown any sign of ramping down their missile attacks on one another. A flurry of whipsawing headlines on 16 June, at one moment suggesting de-escalation and then minutes later further escalation, has not changed the calculus at present. Attacks continue apace and Israel maintains its need to eliminate Iran's nuclear programme.
GILTS: Bear Steepening, Supply Eyed This Morning
Gilts follow Bunds lower, with a lack of significant escalation in the Israel-Iran conflict and a late NY dip in Tsys factoring into the move early today.
- Futures stick within yesterday’s range, trading as low as 92.37.
- Bullish technical conditions remain intact in the contract, initial support and resistance located at yesterday’s low (92.23) & the 50.0% retracement of the Jun 13-16 down leg (92.95), respectively.
- Yields 2-4bp higher, curve steeper.
- 10s last 4.57%, with last week’s move below 4.50% and break of long-term uptrend support lacking traction and quickly fading.
- 2s10s and 5s30s remain in multi-week ranges, last trading 63.6bp and 122.7bp, respectively.
- SONIA futures now -1.0 to -3.0 after printing flat to -2.0 into the gilt open.
- BoE-dated OIS still showing ~48bp of cuts through year-end.
- Our full preview of tomorrow’s inflation data is available here.
- On the supply front, the DMO will come to market with GBP4.5bln of the 4.375% Mar-30 gilt this morning.
BOJ: Ueda: Won't Rule Out Any Future MonPol Tools
Ueda's press conference continues to have a limited impact on markets, with USDJPY still little changed on the session. Latest headline flow has seen the Governor say that there is no definitive answer on whether long-term rates can be controlled.
In response to a question on whether a return to YCC was possible, he said that he did not want to rule out any future monetary policy tools.
