It was by no fault of its own. Legally, 7-Eleven representatives, who reportedly are offering $40 per share to buy Casey's, couldn't attend unless they were invited or were Casey's shareholders. [image-nocss] Still, Alimentation Couche-Tard Inc. vice president and CFO Raymond Pare would have liked to see them there, preferably outlining their proposal to purchase Casey's.
"If the 7-Eleven deal is real, we'd like to see the details of the offer," Pare told CSP Daily News in the hallways of Casey's headquarters shortly after speaking to the about 170 congregated shareholders. "We're a disciplined buyer. If we see a formal offer from 7-Eleven, we will go through the [bidding] process."
Pare acknowledged that process could include raising Couche-Tard's offer of $38.50 per share, a price set only after Casey's bought back 25% of its outstanding stock at $38 per share through a self-tender recapitalization project.
While Pare hesitated to say the Dallas-based 7-Eleven bid is a complete fabrication, Couche-Tard executives have said they believe the offer is "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."
But with shareholders soundly rejecting Couche-Tard's alternative slate of candidates to the Casey's board, the Canadian company must now focus on 7-Eleven's bid as its foot in the door to launch an outright negotiation with Casey's.
Thus far, Casey's has refused to sit down with Couche-Tard, which quietly began its pursuit of Casey's almost a year ago and took it public in April to force Casey's hand. Meanwhile, Casey's acknowledged this month it had "entered discussions" with 7-Eleven Inc. regarding a potential transaction, giving Couche-Tard its best hope yet that it may get to negotiate because of the door opened by 7-Eleven.
In opening the question-and-answer portion of the shareholders meeting, Casey's president and CEO Robert Myers established that he could not answer any questions about the 7-Eleven bid because it is confidential.
So as things stand, getting a deal done will be a long, uphill battle for Couche-Tard, according to analysts watching the hostile-takeover bid.
"What part of $40 do the Canadians not understand?" asked Bill Kavaler, an analyst at Oscar Gruss & Son Inc. in New York, according to a Bloomberg report. "I don't think they [Casey's] are going to start even talking about a deal until Couche-Tard offers at least $40."
Analysts value Casey's at $45 a share without pricing in a takeover, the company said in a September 7 statement. The target price is $46.29, the average estimate of seven analysts surveyed by Bloomberg.
Couche-Tard's current $38.50 offer expires Thursday, September 30.
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 in 11 markets, including eight in the United States (operating under the Circle K name) covering 43 states and the District of Columbia, and three in Canada (operating under the Mac's and Couche-Tard names) covering all 10 provinces.
(Click here for previous CSP Daily News coverage of Casey's and Couche-Tard.)
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