As reported yesterday in a Morgan Keegan/CSP Daily News [image-nocss] Flash, Couche-Tard issued a statement saying, "Casey's has failed to announce any concrete developments relating to 7-Eleven's nonbinding, preliminary indication of interest...unlike Couche-Tard's $38.50 per share firm, fully financed, all-cash offer.... Yet, the Casey's board has authorized discussions to explore a transaction with 7-Eleven while rejecting our request to be included in a full and fair process."
It added, "We, on behalf of the Casey's shareholders, challenge the Casey's board and management to immediately disclose the terms and conditions of 7-Eleven's current proposal. In the face of this challenge, Casey's reluctance to disclose any such terms and conditions can only lead to the inference that Casey's disclosure of 7-Eleven's [$40-per-share proposal]...was a smokescreen designed by Casey's to obtain votes in favor of its incumbent directors by hinting at a potential transaction on the eve of the annual meeting without the intention of pursuing any transaction that would be contrary to promoting their self-interest."
Meanwhile, Casey's issued a statement confirming that the company's annual meeting of shareholders will be held on September 23, as scheduled. Casey's also reported that it remains in discussions with Dallas-based 7-Eleven Inc. regarding a potential transaction. "Casey's does not expect the outcome of the discussions to be determined prior to Casey's annual meeting and does not believe that delaying the meeting is in the best interests of shareholders," it said.
In its statement, Couche-Tard said, "If provided the opportunity to participate in a fair process, to meet and discuss the terms of a mutually satisfactory transaction with the Casey's management and to conduct a confirmatory due diligence review of Casey's, we would be willing to increase our offer price."
It also took Casey's to task for what it called "misleading and incomplete" press releases. Couche-Tard said that in the recent release about proxy advisory service Institutional Shareholder Services (ISS), "Casey's fails to note that, in fact, ISS, in its September 15, 2010 report, urged the Casey's shareholders to show discontent with the Casey's board by recommending that the shareholders of Casey's withhold their votes from Casey's lead independent director William C. Kimball and executive committee member Kenneth H. Haynie."
Couche-Tard also said that ISS endorsed its request to delay the annual meeting by two to three weeks "to allow Casey's to complete a full and fair sale process and report the results of such process to its shareholders prior to the annual meeting."
According to Couche-Tard, the ISS report said, "Several of the responses by the Casey's board...raise questions about whether the board's defensive actions were designed entirely to protect shareholder value, rather than ensure independence regardless of how compelling an offer a bidder makes. In particular, we note the board's acceptance of a very expensive change-in-control provision in the debt instruments which funded the self-tender, despite the fact the company was already in play. We also question the board's decision to proceed with the scheduled annual meeting date despite the late emergence of a second bidder, and the fact shareholders currently have very little visibility into the rapidly-evolving dynamics of two bids for a strategic transaction."
Couche-Tard added, "ISS has clearly recognized that the Casey's board has taken a number of inappropriate defensive actions, which raise serious doubts about the motivation and incentives of the incumbent Casey's board... We believe that ISS' goal of ensuring a fair sale process would be best served by electing all eight of Couche-Tard's nominees to the Casey's board.... Electing all of Couche-Tard's nominees will bring accountability and transparency to the Casey's Board. Couche-Tard's independent nominees are committed to maximizing value for all of the Casey's shareholders and, if elected, will do whatever is required to accomplish this goal. The shareholders of Casey's deserve a board that is committed to maximizing the value of their investment in Casey's."
(Click here for previous CSP Daily News coverage of Casey's and Couche-Tard.)
As of June 30, 2010, Ankeny, Iowa-based Casey's has 1,531 stores in nine Midwestern states.
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.
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