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An unsolicited bid began in March by Alimentation Couche-Tard Inc. to purchase Ankeny, Iowa-based Casey's General Stores Inc. could become a hostile takeover.
Couche-Tard made public a letter to Casey's President and CEO Robert J. Myers, dated April 9, which reiterated the offer — $36 per share, totaling $1.9 billion — and said the Laval, Quebec-based company was "compelled to make this proposal known to your shareholders," as Casey's was unwilling to engage in negotiations. The all-cash proposal represents a 14 percent premium over Casey's closing price on April 8.
In a response later that morning, Myers wrote Couche-Tard President and CEO Alain Bouchard, saying he was "very disappointed that you have decided to launch a hostile public campaign," and called the offer "significantly undervalued."
Casey's senior vice president and CFO, Bill Walljasper, told Convenience Store News the c-store chain came to the conclusion after deliberating with senior management and financial advisors in terms of its strategic plan.
"We have reached out to several shareholders, and based on those conversations as well as with the market ... they have the same sentiment that $36 price was significantly below the value of Casey's."
He added: "We do have a track record of providing shareholder value, and it provides more than the $36 offer. And for any future offers that come, we'd do our due diligence."
A source close to the matter told CSNews Couche-Tard is committed to its $36-per-share offer, and while the company doesn't want to begin a proxy fight and hostile takeover, it will do so if deemed necessary.
If the transaction were to be approved, Couche-Tard would significantly increase its presence in the Midwest U.S.
"Couche-Tard does not have a significant presence in the Midwest, and Casey's has a very strong presence in smaller, rural locations across the Midwest," Morgan Keegan analyst Brownlow told CSNews. "It would dramatically increase [Couche-Tard's] footprint."
For details of what a Casey's acquisition would mean to Circle K, go to www.csnews.com.