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LAVAL, Quebec -- Couche-Tard, operator of 5,200 outlets across North America, confirmed rumors that it would like to purchase hundreds of retail outlets that ConocoPhillips will divest in the Midwest and California, reported the Financial Post.
Although Couche-Tard might want all 830 ConocoPhillips locations that will be divested, chief executive Alain Bouchard noted that the company might not have the chance to bid on all the locations it desires, as the current franchisees -- which operate 500 of the locations -- have the first choice on the offer.
"We will certainly look at these assets, but I am not confident we can buy a large number of these stores -- though we will try," Bouchard told the Post. The company has $1.3 billion in resources for future purchases, he noted.
Industry analyst, Jessy Hayem of Desjardins Securities, agreed that it is unlikely that the company will achieve a "bulk acquisition," of ConocoPhillips' stations. However, it could buy multiple stores "in the eventuality they are not sold to existing dealers as Conoco would like," he said.
While Couche-Tard may have a hard time acquiring ConocoPhillips' stations, it will pursue Royal Dutch Shell's stations in North America. Couche-Tard already purchased 236 stations from Shell earlier this year in Florida, Denver, Baton Rouge, La. and Memphis, Tenn.
Shell might want to follow in ConocoPhillips' steps, as it is focusing on its exploration investments and "may want to free up some assets to do that" including the sale of its 2,000 retail outlets in North America, according to Blackmont Capital analyst David Hartley.
Even if the ConocoPhillips outlets are not acquired by Couche-Tard, the company will still seek out other major acquisitions. Couche-Tard bought 450 stores in the first seven months of the company's fiscal year, and Bouchard told the Post that it expects to exceed 500 purchases in 2007 and 2008.
In other ConocoPhillips' news, the company is finalizing plans to sell a 380 location network in Eastern Europe to its partner, Russian oil company LUKOIL, according to an Associated Press report. ConocoPhillips owns 20 percent of LUKOIL.
The Jet network of gas stations are located in Belgium, the Czech Republic, Slovakia, Poland, Hungary and Finland, according to Leonid Fedun, LUKOIL's vice president.
"We aren't releasing the cost of the deal for now; it's a topic of negotiation," Fedun told the Interfax agency, a European media outlet.
Phil Blackburn, a spokesman for Houston-based ConocoPhillips, confirmed talks with LUKOIL "regarding various European service-station assets," however, he noted that "negotiations have not yet concluded," the AP reported.