Q: What is your take on ATD's announced "preliminary" offer for 7-11? The market seemed to not react to this. Some time ago they contemplated a large deal to purchase Total. That was not well received and it eventually did not go forward. If the 7-11 goes ahead, what impact will there be on the share price for ATD? Would they have to take on a lot of debt or issue a large amount of shares? Many thanks
5i Research Answer:
Please see this answer from August 18. No 'big' deal is ever easy and ATD has walked away from deals in the past. We do not think Japanese shareholders will want to take 'all' compensation in ATD shares so we do think any concluded deal will need to have a very large cash component. As it is just 'discussions' right now we can't predict a price, as the valuation paid will dictate whether it is a good deal or not. ATD certainly knows how to acquire companies, and this would make it the global leader in the sector. So if the price is right we think it would be quite positive overall.