Casey's rejects hostile takeover offer

A $36-per-share buyout offer for Casey's General Stores by a Canadian retailer was swiftly rejected by the Ankeny-based convenience store chain.

Alimentation Couche-Tard of Laval, Quebec, said its offer represents a 14 percent premium over Casey's closing price of $31.59 per share on April 8, 2010, and a 17 percent premium over its 90-day average closing price.

"We strongly believe that our $36-per-share all-cash proposal is compelling for Casey's shareholders as it offers them the opportunity to realize full and immediate value for their investment," said Alain Bouchard, president and chief executive officer of Couche-Tard.

Bouchard said the company has "great respect for Casey's operations, management and talented employees and are confident that they would benefit from the expanded opportunities and resources available to them as part of a larger and stronger company."

The unsolicited takeover offer was disclosed today. Couche-Tard initially contacted Casey's in October 2009, but went public with the hostile takeover bid after failing to receive affirmative action from Casey's board.

Casey's fired back swiftly with a rejection letter, saying "Couche-Tard "is trying to buy U.S. companies on the cheap."

"We are very disappointed that you have decided to launch a hostile public campaign regarding your unsolicited offer to acquire Casey's for $36 per share in cash," said a lette from Robert J. Myers, president and CEO of Casey's General Stores. He said the offer "significantly undervalues Casey's and is not in the best interests of the corporation."

Casey's shares skyrocketed $6.92, or nearly 22 percent, by 9:50 a.m, to $38.54 per share on the news, suggesting investors are hopeful some kind of deal, possibly one even richer than the original Couche-Tard offer, will come out of the takeover bid.

Couche-Tard operates a network of 5,883 convenience stores in the United States and Canada. It has established itself as a successful acquirer of convenience store chains in the United States, having bought Circle K. Corporation, with 1,663 stores, from ConocoPhillips in 2003, and several smaller groups of stores.

Casey's General Stores operates 1,507 convenience stores in the United States. It is the dominant convenience store chain in the Cedar Rapids market due to its 2006 deal to buy 33 HandiMart stores for Nordstrom Oil. Co. for about $63 million.

Couche-Tard shares trade on the Toronto Stock Exchange under the symbols ATD.A and ATD.B. Casey's General Stores shares trade on the Nasdaq under the symbol CASY.