At the same time, Couche-Tard announced that it plans to file preliminary proxy materials with the Securities& Exchange Commission (SEC) to nominate a slate of nine independent candidates for election [image-nocss] to the board of directors of Casey's.
"We continue to firmly believe that a combination of Couche-Tard and Casey's is in the best interests of the shareholders and other constituencies of both Casey's and Couche-Tard," Alain Bouchard, president and CEO of Couche-Tard, said. "Our increased $36.75 per share cash offer is well above the value that Casey's, on its own and in any reasonable timeframe, could deliver to its shareholders and allows the shareholders of Casey's to receive a significant cash premium for their investment."
He added, "This enhanced all-cash offer reflects our discussions with the shareholders of Casey's and demonstrates our commitment to this transaction and confidence in our ability to consummate it in a timely manner."
Couche-Tard stock analyst Martin Landry of Desjardin Securities said in a subsequent report yesterday that Couche-Tard's meeting with Casey's shareholders over the past two months "gave Couche-Tard some visibility as to the offer price necessary to get a majority of shareholders on board. We understand that while only 19% of Casey's shareholders tendered their shares to Couche-Tard under the previous offer [of $36 per share], a higher number were supportive of the offer; hence, Couche-Tard could be closer to a majority than the 19% result implies."
Landry added, however, that in light of a recent Casey's same-store sales report, Couche-Tard's increased bid is less, in terms of EBITDA multiple, than the original bid was.
"The revised offer represents a 7.2x multiple on Casey's trailing 12-month EBITDA, similar to the previous offer's 7.4x multiple," Landry wrote. "The difference being that Casey's has reported its year-end results in the interim."
Still, Bouchard said he is confident the share tender, which is scheduled to end Aug. 6 after being extended for a month, will be successful.
"Despite the fact that Casey's board and management team has thus far refused to negotiate with Couche-Tard, not allowed us to conduct any due diligence and taken actions to impede our premium offer, including commencing costly and meritless litigation against Couche-Tard and putting in place lucrative golden parachute arrangements for Casey's executives, we and our advisors stand ready to negotiate with Casey's and its advisors a mutually acceptable agreement," he said. "Now is the time to put our two great companies together."
Meanwhile, the proxy materials Couche-Tard plans to file with the SEC may be the company's best shot at breaking the wall down between the two companies.
In addition to seeking election of its nine independent director nominees, Couche-Tard seeks to repeal any new by-laws or amendments to the by-laws of Casey's adopted by the Board of Directors without shareholder approval after June 10. That includes changes that make it financial challenging for Couche-Tard (or any other entity) to takeover Casey's.
"We are confident our director nominees will bring independent oversight and accountability to the Casey's board," Bouchard said "We encourage Casey's shareholders to send a clear and strong message to the Casey's board that they want directors who will act in their best interests."
Credit Suisse Securities (USA) LLC is acting as financial advisor to Couche-Tard and dealer manager for Couche-Tard's offer. Dewey & LeBoeuf LLP and Nyemaster, Goode, West, Hansell & O'Brien P.C. are acting as legal counsel. Innisfree M&A Inc. is acting as information agent for Couche-Tard's offer and proxy solicitor in connection with Couche-Tard's solicitation of proxies at the 2010 annual meeting of shareholders of Casey's.
Goldman, Sachs & Co. is acting as financial advisor to Casey's, and Cravath, Swaine & Moore LLP and Ahlers & Cooney PC are providing legal advice.
Laval, Quebec-based Couche-Tard operates a network of 5,883 convenience stores located in 11 large geographic markets, including eight in the United States covering 43 states and the District of Columbia, and three in Canada covering all 10 provinces.
Casey's General Stores Inc., based in Ankeny, Iowa, has 1,513 corporate stores in nine states.
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