Couche-Tard moves for U.S. chain
Canadian convenience store operator Alimentation Couche-Tard Inc. has bid $1.8 billion US for Iowa-based chain Casey's General Stores Inc.
The Montreal-area company is offering $36 US per share to acquire all of the U.S. company's shares, which trade on the Nasdaq exchange.
The offer is a 14 per cent premium to Casey's closing stock price on Thursday afternoon.
Couche-Tard had previously approached Casey's management with its offer, but after being rebuffed and shown no willingness to open discussions for a merger, the company went public with its offer on Friday.
"Our goal remains to work with you to agree to a negotiated transaction," Couche-Tard CEO Alain Bouchard wrote in a letter to Casey's director, Robert J. Meyers.
"However, due to your unwillingness to engage in discussions and the unique opportunity presented by our proposal for your shareholders to realize full and immediate value, we are compelled to make this proposal known to your shareholders," the letter said.
In a public reply, Casey's CEO Robert Myers wrote, "Your proposal significantly undervalues Casey's and is not in the best interests of the corporation."
"We believe the timing of your proposal is very opportunistic given the impact of the recession and recent severe weather within our marketing territory. Casey's has navigated the downturn successfully and is extremely well positioned to benefit as the economic recovery continues."
The Midwest-focused chain currently owns 1,507 gas stations and convenience stores across the United States
The deal, subject to approval by Casey directors and shareholders, would be Couche-Tard's biggest foreign acquisition since it purchased the Circle K chain of stores in 2003.
With 5,883 locations overall, Couche-Tard already has a solid U.S. footprint, but little presence in Midwestern states such as Iowa, Missouri and Illinois where Casey's is entrenched.