"Under the board's leadership, Casey's is executing well on its strategic growth initiatives and creating and delivering far greater value than Alimentation Couche-Tard Inc.'s $36.75 per share offer. [image-nocss] Couche-Tard's proposal to replace our highly qualified, experienced directors with its hand-picked nominees has one purposea quick sale of Casey's to Couche-Tard at a low price," said the company's latest salvo in the battle for shareholder support, a letter sent to shareholders and filed with the Securities & Exchange Commission (SEC) on Monday.
As reported in a Morgan Keegan/CSP Daily News Flash yesterday, the lettersigned by Casey's president and CEO Robert J. Myersurges shareholders to vote for the current Casey's board of directors rather than the slate of candidates that Alimentation Couche-Tard Inc. is fielding as part of its takeover bid.
"Casey's has consistently outperformed its convenience store peers and the S&P 500... Casey's has consistently driven increased shareholder returns," it added. "Over the past three years prior to the announcement of Couche-Tard's offer on April 9, 2010, our stock price has increased 24%, compared to our peers, which on average are down 46.3%, and the S&P 500, which is down 17.9%, over that same period."
The letter continued, "Casey's has a strong history of transparency and good governance. In fact, for the last two years Casey's was recognized by Forbes.com as one of the 100 most "trustworthy companies" in the United States in an assessment of "true quality of corporate accounting and management practices."
"Make no mistake, Couche-Tard is attempting to replace your Board with its hand-picked slate of directors to achieve one purpose: a quick sale of Casey's to Couche-Tard at a low price. To that end, Couche-Tard continues to make misleading statements about Casey's board in an attempt to distract you from the inadequacy of its offer."
"The fact is that the Casey's board is acting in the best interests of all shareholders."
It added, " Contrary to Couche-Tard's suggestion that our recapitalization plan was financial engineering aimed at artificially inflating Casey's stock price, the recapitalization implements the board of directors' decision to create a more efficient and lower cost capital structure, one that will boost returns to equity holders for the remainder of fiscal years 2011, 2012 and for years to come."
"In another desperate attempt to distract you from the real issue, Couche-Tard has also mischaracterized the terms of our financing for the recapitalization. Our objective in seeking financing for the recapitalization was to obtain the lowest borrowing cost possible. The terms of the private placement were the result of negotiations toward that goal, and we are pleased to have achieved that goal with the 5.22% ratethe the lowest in the company's history, and secured favorable covenants to enable Casey's to continue to execute on its strategic plan. The fact is noteholders requested a change in control "make whole" premium in the terms of the financing as a direct result of Couche-Tard's hostile offer. We don't believe we could have secured this very attractive financing package without it. We believe that the terms of other financing options would have been less favorable for Casey's shareholders, and our commitment is to create value for our shareholders, not Couche-Tard's."
"We also note that more than four months after making its offer public, Couche-Tard still has not secured financing, that six events have occurred which violate various conditions to its offer and that Couche-Tard recently added a condition to its offer that is virtually incapable of fulfillmentall of which effectively make Couche-Tard's offer illusory."
Click hereto view the full text of the letter and accompanying data.
It follows a letter sent last week by Couche-Tard to Casey's shareholders urging support of its own candidates for the Casey's board. Both letters were sent ahead of Casey's annual meeting of shareholders scheduled for September 23, 2010. (Click here for previous CSP Daily News coverage.)
Laval, Quebec-based Couche-Tard operates a network of 5,878 c-stores a,146 of which include motor fuels dispensinglocated in 11 large geographic markets, including eight in the United States (operating primarily under the Circle K name) covering 43 states and the District of Columbia, and three in Canada (operating primarily under the Mac's and Couche-Tard names) covering all 10 provinces.
Casey's and its wholly owned subsidiaries operate c-stores under the name Casey's General Store, HandiMart and Just Diesel in nine Midwestern states, primarily Iowa, Missouri and Illinois. The stores carry a broad selection of food (including freshly prepared foods such as pizza, donuts and sandwiches), beverages, tobacco products, health and beauty aids, automotive products and other nonfood items. In addition, all of its stores offer gasoline.
Casey's has 1,531 stores as of June 30, 2010. Approximately 61% of all the stores are located in areas with populations of fewer than 5,000 persons, while approximately 14% of our stores are located in communities with populations exceeding 20,000 persons. It said that it seeks to meet the needs of residents of smaller towns by combining features of both general store and c-store operations. Smaller communities often are not served by national-chain c-stores, it added.
(Click here for previous CSP Daily News coverage of the Casey's/Couche-Tard saga.)
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