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Couche-Tard’s bid for Carrefour gets ‘a clear and final no’ from French finance minister

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Finance Minister Bruno Le Maire expressed France’s stiff opposition to a possible near-US$20 billion (C$25 billion) takeover of Carrefour by Canada’s Alimentation Couche-Tard on Friday, driving the French retailer’s shares down by 4.5 per cent.

“Food security is strategic for our country so that’s why we don’t sell a big French retailer,” Le Maire told BFM TV. “My answer is extremely clear: we are not in favour of the deal. The no is polite but it’s a clear and final no,” he said.

Carrefour, which acknowledged Couche-Tard’s approach to discuss a combination on Wednesday, had no immediate comment on Friday.

Read more: France opposes Couche-Tard’s $25B Carrefour bid citing food security

Convenience-store operator Alimentation Couche-Tard’s 20 euros per share offer for Carrefour – continental Europe’s largest retailer – also raises other political considerations, as Carrefour is France’s biggest private-sector employer.

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Carrefour CFDT union representative Sylvain Mace told BFM business that staff were “surprised and a bit worried” by the offer, which raised concerns over jobs and the future management of the French retailer.

Read more: Couche-Tard confirms merger talks with French grocery giant Carrefour

If Le Maire’s opposition to the approach is to protect jobs, “it is a positive signal”, Mace said.

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UBS analysts said Carrefour shares were now pricing a low 20 per cent probability of a deal happening.

“Clearly the forceful commentary from the French government suggests they can block the deal. Further, given this was a ‘friendly’ approach we doubt Couche-Tard or indeed Carrefour would challenge this directly,” they wrote.

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Separately, Credit rating agency Moody’s said Couche-Tard’s offer for Carrefour would be at about 6.8 times enterprise value to adjusted EBITDA, which was “consistent” with Couche-Tard’s other large acquisitions in the past.

($1 = 0.8240 euros)

(Reporting by Dominique Vidalon and Benoit Van Overstraeten; Editing by Jason Neely and Pravin Char)

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