Casey's board has resisted its suitor's charms, said the report.
Bouchard said he would not have done anything differently. "We knew that it would be complicated...but it became a lot more severe than [image-nocss] what we thought," he later told reporters at a news conference, according to a Canadian Press report.
Yesterday, Couche-Tard again extended the deadline of its unsolicited offer to acquire Casey's General Stores Inc. for $36.75 per share in cash. The offer had been scheduled to expire at 5:00 p.m. EST, on August 30, 2010.It will now expire at 5:00 p.m. EST, on September 30, 2010, unless the offer is further extended.
All other terms and conditions of the tender offer remain unchanged.
As reported in a Morgan Keegan/CSP Daily News Flash yesterday, 546,435 shares of common stock of Casey's (including 76,105 shares subject to guarantees of delivery), representing approximately 1.1% of the outstanding shares of Casey's (without giving effect to the recapitalization plan announced by Casey's), were tendered and not withdrawn pursuant to the offer.
Since Couche-Tard's last offer extension, Casey's has completed its own "Dutch auction" tender offer that will see it spend $500 million to buy back nearly 26% of its own shares for $38 each. Shareholders can withdraw their support at any time before the bid expires. Casey's announced yesterday the final results of the Dutch auction, which expired on August 25, 2010, at 12:00 a.m. EST.
Based on the final count by the depositary for the offer, a total of approximately 26.8 million shares were validly tendered and not withdrawn at a purchase price of $38.00 per share, including approximately 12.6 million shares validly tendered through notice of guaranteed delivery. Due to the offer being oversubscribed, Casey's is purchasing a pro-rated amount of approximately 49% of shares from each tendering shareholder. As such, Casey's accepted for purchase an aggregate of 13,157,894 million shares of its common stock at a purchase price of $38.00 per share, for a total cost of approximately $500 million, excluding fees and expenses related to the Offer. The 13,157,894 million shares purchased in the offer represent approximately 25.8% of Casey's shares outstanding as of August 31, 2010.
Following consummation of the offer, Casey's said that expects to have approximately 37.8 million shares of common stock. Payment for the shares accepted for purchase under the offer will be made promptly, it said, and all shares tendered and not accepted for purchase will be returned.
Regarding the extension, Ankeny, Iowa-based Casey's said, "Given that Casey's is already creating more value than is reflected in the Couche-Tard offer and will deliver significant additional upside through execution of our business plan and strategic growth initiatives, we are not surprised that so few shares have tendered into Couche-Tard's inadequate, highly conditional $36.75 per share offer."
Casey's noted that the number of shares tendered into Couche-Tard's offer has declined to 1.1% of Casey's issued and outstanding shares from approximately 12% on August 2, 2010, and approximately 19.2% on July 12, 2010.
"The low number of shares tendered by Casey's shareholders is not meaningful, given that Casey's Dutch auction was offered at the same time at a higher price," Martin Landry, analyst with Montreal-based Desjardins Securities, wrote in a note to investors.
Some of Couche-Tard's supporters may have taken up Casey's offer. Others may have withdrawn their support until Casey's annual meeting on September 23 in the hope of getting an improved offer.
Industry analysts believe Couche-Tard's effort to acquire Casey's is looking more unlikely, said the report.
Ben Brownlow, an analyst with Morgan Keegan & Co., said Tuesday that he puts the chances of Couche-Tard prevailing in its hostile takeover attempt at "very, very slim," reported The Globe & Mail.
Couche-Tard would have to raise its offer to at least $38, given the range Casey's stock has been trading in, he said. Bouchard and his management team are "notorious," however, for their disciplined approach to acquisitions and may shy away from further sweetening their offer after already having increased it slightly to $36.75 from $36 in July, Brownlow added.
Landry said Casey's self-tender offer has increased the cost to acquire the company to $1.98 million or $38.90 per share. That includes $1.39 million to purchase 37.9 million Casey's shares, $500 million in debt incurred from the share auction and $95 million due to a change-of-control provision imbedded in a loan to fund the auction.
Couche-Tard needs at least half of Casey's shareholders to support its slate of board candidates.
Casey's has 1,531 stores as of June 30, 2010. The Ankeny, Iowa-based company 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.
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.(Click here for previous CSP Daily News coverage of the ongoing Casey's/Couche-Tard saga.)
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.