Casey's stock price dropped as low as $40.81 per share Friday after peaking at $44.24 in mid-September. Just prior to Couche-Tard announcing it would allow its offer [image-nocss] to buy all outstanding shares of Casey's stock for $38.50 to expire, Casey's stock was trading at $42.50. And prior to Couche-Tard making its desire to purchase Casey's public in early April, Casey's stock was trading for $31.59/share.
For a glimpse into the mindset of each company as they felt their way through the takeover effort, see the October issue of CSP magazine.
Communications firms working with both Casey's and Couche-Tard told CSP Daily News on Friday that neither companies' executives were accepting interview requests.
For their part, analysts watching each company were not surprised to see Couche-Tard throw in the towel on its struggle to purchase Casey's for about $2 billion.
"This outcome was partly anticipated given that Casey's board and Couche-Tard's management have significantly different views of the value of Casey's," Martin Landry, an analyst with Desjardins Securities, Montreal, wrote in a research note Friday morning. "Casey's board only seemed willing to consider offers materially above $40/share, and Couche-Tard's announcement suggests that it is unwilling to raise its bid to such levels."
"Frustrated by the unwillingness of Casey's board to negotiate, we believe that Couche-Tard has stuck to its disciplined...approach to acquisitions by not raising its bid into questionable territory prior to gaining access to Casey's books (i.e., without having a better idea of potential synergies)," Michael Van Aelst, an analyst with Newcrest/TD Securities, Toronto, wrote in a research note Friday morning.
"Since we are convinced that Couche-Tard is still interested in acquiring Casey's at an acceptable price, we wouldn't rule out another takeover attempt down the road should Casey's valuation drop or should Casey's shareholders convince its board to enter discussions with Couche-Tard," he added. "However, in the interim, we expect Couche-Tard to turn its attention to other potential acquisition opportunities both in North America and Europe."
Landry agreed, noting, "Although we believed that the acquisition of Casey's could have created significant value for Couche-Tard's shareholders, we expect the company to continue to seek smaller-sized acquisitions with good accretion potential."
And for his part, Ben Brownlow, an analyst with Morgan Keegan, Memphis, Tenn., did not even bother to publish a research note following Couche-Tard's Thursday afternoon pulling of the plug. "Yesterday's news," he told CSP Daily News on Friday, "[is] in line with what I expected. I would expect an announcement from Casey's on 7-Eleven's [separate $40-per-share offer] sooner than later, but continue to believe ultimately Casey's will continue on a stand-alone basis backed by a management team with a strong track record."
Laval, Quebec-based Couche-Tard operates a network of 5,878 c-stores, 4,141 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.
As of June 30, 2010, Ankeny, Iowa-based Casey's has 1,531 stores in nine Midwestern states, primarily Iowa, Missouri and Illinois.
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