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NEW YORK -- A large institutional shareholder in Casey's General Stores wrote to the board of directors of the Ankeny, Iowa-based convenience store chain, urging it to engage in formal negotiations with the management team of Alimentation Couche-Tard, the giant Canadian convenience chain that launched an unfriendly takeover bid for the company in March.
In a letter addressed to the Casey's board, care of Casey's President and CEO Robert J. Meyers, ClearBridge Advisors LLC of New York wrote:
"Pursuant to our conversation with you and Bill Walljasper [senior vice president and CFO] on June 23, 2010, we urge the management and the board of directors of Casey's to engage in formal negotiation with the management team of Alimentation Couche-Tard with respect to their $36 cash offer to acquire 100 percent of the outstanding shares of Casey's. Anything less gives the impression that independence, not the maximization of shareholder value, is the Board's highest priority."
The letter from ClearBridge, which beneficially owns 810,739 of Casey's almost 51 million outstanding shares, goes on to support the board's argument that Couche-Tard's bid is undervalued and does not adequately capture the full earnings power and potential of Casey's. "We also believe that the offer does not account for the revenue synergies and cost savings created through a combination of Casey's and Couche-Tard," said the letter.
ClearBridge also noted Casey's unwillingness to negotiate was also communicated to it during Couche-Tard's visit to ClearBridge's offices June 4, 2010.
"Discussion of the offer or other options does not restrict or preclude the boards' ability to reject Couche-Tard's offer, or any subsequent alternative, that may result from negotiation, in our view," said the letter. "Conversely, the board's intransigence discourages a higher offer and could result in shareholder wealth destruction should the Couche-Tard tender offer be withdrawn and not accepted by shareholders."
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