01:47 PM EDT, 08/20/2024 (MT Newswires) -- Alimentation Couche-Tard's ( ANCTF ) acquisition of Seven & i, if it went through, could require significant financing. BMO's scenario (includes assumed divestitures) requires US$13 billion of debt and US$29 billion of equity (50% dilution), analyst Tamy Chen writes.

Chen notes that there may be anti-trust risk given what looks like "decent overlap" in several U.S. states. At this time, the synergies from Japan are unclear.

"Conceptually, there should be reverse synergies in food, but this transaction comes with a lot of leverage and equity dilution relative to what could be gained, in our view."

Couche-Tard is rated Outperform, with an $89 target.

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