ANKENY, Iowa — The board of directors of convenience store chain Casey’s General Store here has rejected a hostile takeover attempt from Canadian retailer Alimentation Couche-Tard, saying the $1.9 billion offer “vastly undervalues Casey’s and our future prospects.”
Couche-Tard’s offer of $36 per share — a 14% premium on Casey’s closing share price Thursday — came to light after Casey’s board twice rejected private offers from Couche-Tard. “We are committed to pursuing this transaction and are prepared to take all necessary steps to make this combination a reality,” Alain Bouchard, Couche-Tard’s president and chief executive officer, said in a statement.
Couche-Tard is the largest independent convenience store operator in North America with more than 5,800 stores. Casey’s operates more than 1,500 stores and posted annual sales of $4.7 billion in the fiscal year ended April 30, 2009.
Karen Short, an analyst for BMO Capital Markets who follows Casey’s, said Friday that Casey’s is likely worth more than the Couche-Tard offer, citing its real estate portfolio, low debt levels and industry-leading margins as a result of private-label gasoline and an advanced prepared-foods program. She added, however, that the offer would pressure the company to demonstrate it can turn those advantages into shareholder value.
Short noted that Couche-Tard has until Wednesday to introduce items for a shareholder vote onto the company’s annual meeting agenda and could nominate board members for election until June.
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