As reported in a Morgan Keegan/CSP Daily News Flash, the letter, signed by Couche-Tard president and CEO Alain Bouchard, began, "As a shareholder of Casey's...you have an important decision to make regarding the future of [image-nocss] your investment in Casey's. Next week [September 23], Casey's will hold its annual meeting of shareholders, at which you will decide upon a slate of directors who you believe will serve your best interests and maximize the value of your investment in Casey's."
It added, "As you make your voting decision, we want to set the record straight once and for all and clear up the continual misrepresentations made by the Casey's board. We urge you to consider the following:
7-Eleven has not made a formal offer to acquire Casey's. Unlike Couche-Tard's $38.50 per share fully financed cash premium offer to acquire all of the outstanding shares of Casey's, 7-Eleven has merely suggested a nonbinding indication of interest at $40 per share. There is no certainty that 7-Eleven will follow through on its suggestion of a potential transaction between Casey's and 7-Eleven. Furthermore, there is no guarantee that your board will fulfill its fiduciary obligations to you and maximize the value of your investment in Casey's by pursuing a sale of Casey's to the highest bidder. As a shareholder of Casey's, do you really believe that the Casey's board will follow through on this process and maximize the value of your investment if its directors are re-elected at the upcoming annual meeting?
Couche-Tard is willing to further increase its offer. Given our strong commitment to an acquisition of Casey's, we have requested to the Casey's board, both privately and publicly, that Couche-Tard be invited into Casey's sale process. As we have said, if Couche-Tard is granted access into a fair process and has the opportunity to conduct a confirmatory due diligence review of Casey's on the same playing field as 7-Eleven, we would be willing to consider further increasing our offer. Currently, the difference in price between our firm, public offer and 7-Eleven's nonbinding preliminary indication of interest is merely 4%. Yet, the Casey's board has authorized discussions to explore a transaction with 7-Eleven whereas they continue to reject our request to be included in the process. As a shareholder of Casey's, don't you want directors who will examine every opportunity to seek the highest value for your investment by giving Couche-Tard, or any other interested party, every opportunity to make an improved offer?
Couche-Tard's offer is fully financed. Couche-Tard secured up to $1.5 billion in financing, which together with currently available funds, will be more than sufficient to fund the all cash transaction. For the Casey's board to attempt to use the financing issue as a reason for rejecting our offer is outrageous. Further, as part of its misinformation campaign, your board claims that the "unusual and extensive level of conditionality" concerns them. The reality is that most of the conditions in our offer are in place because your board has refused to speak to us or give us any access to conduct due diligence. Should Casey's afford us the opportunity to sit down with the Casey's board and management, we fully expect most of the conditions to fall away, as they typically do in situations like this. As a shareholder of Casey's, don't you want directors who will engage with a committed buyer like Couche-Tard who has been, and remains, committed to closing a transaction as expeditiously as possible?
Your board has taken actions contrary to your best interests. Over the past five months, the Casey's board has gone to extreme lengths to put in place a laundry list of impediments to our premium all-cash offer, including denying Couche-Tard the opportunity to participate in a full and fair process, implementing the leveraged recapitalization plan with an unusual and highly coercive "poison put" feature, conducting expensive and meritless litigation against Couche-Tard, adopting a poison pill and putting in place golden parachute arrangements for executives of Casey's. As a shareholder of Casey's, do you really want to be represented by directors who appear to spend more time in protecting their own jobs, and the jobs of Casey's executive management team, rather than maximizing value for Casey's shareholders?"
The letter also said, "Couche-Tard operates using a highly decentralized model, and we expect to keep most, if not all, of the employees of Casey's in place. We also believe access to Couche-Tard's platform will provide the suppliers of Casey's with increased opportunities to expand their sales to convenience store chains within Couche-Tard's portfolio. In the past, Couche-Tard has always been respectful to local businesses around the companies it acquired. Our decentralized model has enabled us to continue the relationships with existing suppliers and vendors. In contrast, in the event of a transaction with 7-Eleven and given 7-Eleven's business model, we believe that the various constituents of Casey's should expect significant changes to the operating environment of Casey's that may be adverse to their interests."
And in again promoting its slate of independent board nominees, Couche-Tard asked, "Do you trust the existing board to do what's right for shareholders?"
Click hereto read Couche-Tard's official acquisition information website, containing the full text of the letter and other statements concerning its bid for Casey's.
Meanwhile, Ankeny, Iowa-based Casey's said that two of the leading proxy advisory services, Institutional Shareholder Services (ISS) and Glass Lewis & Co., recommends that Casey's shareholders vote for the reelection of the majority of Casey's director nominees.
Robert J. Myers, Casey's president and CEO, said, "We have serious concerns that Couche-Tard's nominees will not represent the best interests of all of Casey's shareholders and instead have one purposea quick sale of Casey's to Couche-Tard at a low price to benefit only Couche-Tard shareholders. Further, Couche-Tard's nominees lack the requisite sector experience to support the implementation of Casey's ongoing strategic growth initiatives."
Click hereto read the "Support Casey's" website, containing the full text of the letter and other statements concerning Couche-Tard's attempted acquisition.
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, Casey's has 1,531 stores in nine Midwestern states, primarily Iowa, Missouri and Illinois.
(Click here for previous CSP Daily News coverage of Casey's and Couche-Tard.)
For the inside story on Couche-Tard's yearlong takeover bid for Casey's, watch for the October issue of CSP magazine.
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