You are here
MONTREAL -- Alimentation Couche-Tard is paying more than $20,000 to each of its independent nominees to the board of takeover target Casey's General Stores, The Canadian Press reported, citing a preliminary proxy filed with U.S. regulators by the Canadian convenience store chain.
The nine candidates will get the one-time payment and "all reasonable expenses" for agreeing to serve as a nominee for the board of Casey's, which has rebuffed Couche-Tard's $1.9 billion bid launched three months ago. If elected, they also would be eligible to receive other benefits from Casey's, including an annual retainer of $40,000 and a meeting fee of $1,000 for each shareholder and committee meeting attended, according to the report.
Couche-Tard declined to comment about the payments.
Board candidates are deemed independent according to securities law because they are not officers or employees of Casey's, an Iowa-based convenience store operator.
Outside board members are supposed to bring unbiased opinions about the company's decisions. But in this case, they would be elected by Casey's shareholders to pave the way for a negotiated sale to Couche-Tard, which so far has been thwarted by the existing board, the report stated.
Couche-Tard said the nominees understand they have an obligation under Iowa law to discharge their responsibilities as directors in good faith and consistent with their fiduciary duties to Casey's and its shareholders. "The only commitment Couche-Tard and the purchaser have sought from the nominees is that they will act in the best interest of Casey's and its shareholders and exercise their independent judgment," the proxy said.
But it adds that a vote for the nominees will let Casey's and the nominees know that they want to the opportunity to accept the offer. "We believe that you deserve a board of directors that is answerable to you and that will act in your best interests,” the proxy continued. "By voting for the nominees, you can demonstrate to the nominees and Casey's your support for the offer and proposed merger.”
The election will take place at Casey's General Stores annual meeting, expected to be held in late September or early October, The Canadian Press reported.
Couche-Tard has set an Aug. 6 deadline for Casey's shareholders to tender to its $1.9 billion offer to take over the 1,500-store chain. On Thursday, the Montreal-area company increased its hostile takeover bid by 75 cents per share to $36.75 cash per Casey's share -- an improvement of about two percent over Couche-Tard's initial bid this spring.
The offer is subject to a number of conditions, including the removal of roadblocks that Casey's put in place to hamper Couche-Tard's takeover efforts. Casey's is expected to reject the offer, but has urged its shareholders to hold off on tendering their stock until it makes a recommendation in "due course," according to the report.