Ashna Mallowe blog

Casey's rejects latest Couche-Tard buyout offer

NEW YORK – The board of Casey's General Stores Inc. rejected the latest takeover bid from convenience store operator Alimentation Couche-Tard Inc., saying Tuesday that the $1.47 billion offer was too low.

The Ankeny, Iowa, company also said it has received a higher preliminary proposal from an unnamed third party and has agreed to begin talks with that suitor.

Its shares climbed 10 percent to a new 52-week high on the news.

Canada's Alimentation Couche-Tard, which owns the Circle K brand in the U.S., has struggled to build support for its attempt to acquire Casey's and has nominated eight people for election to the Casey's board.

The company, based in Laval, Quebec, said Tuesday that the announcement by Casey's shows its board "has finally made the decision to put the company up for sale. Couche-Tard looks forward to participating in Casey's auction process."

It said shareholders should support Couche-Tard's slate of eight independent board nominees "who will act in the best interests of all Casey's shareholders and conduct a fair auction of Casey's."

Casey's will hold its annual stockholders' meeting on Sept. 23. The company runs convenience stores mostly in the Midwest.

Last week, Couche-Tard raised its offer to $38.50 per Casey's share in cash from $36.75. The $1.47 billion total price excludes about $528 million in Casey's debt.

Casey's said Tuesday that the new bid "substantially undervalues" the company and is not in the best interests of shareholders or the company.

It said it has received another preliminary proposal of $40 per share in cash but that offer also undervalues the company. Casey's said it nonetheless has agreed to enter talks with the unnamed suitor to see if a deal can possibly be reached.

Casey's shares climbed $3.86 to $42.76.

In a letter sent to stockholders, Alimentation Couche-Tard President and CEO Alain Bouchard said the company's increased bid "is the most attractive strategic alternative available to shareholders."

Bouchard also said that his company has secured up to $1.5 billion in financing for the potential deal, demonstrating the seriousness of the company's bid.