"Your vote is very important at this pivotal time in the company's history," wrote president and CEO Robert J. Myers. "As you may know, Alimentation Couche-Tard Inc. is attempting to replace your board with its hand-picked slate of nominees. [image-nocss] We believe this is simply an attempt to advance its inadequate, unsolicited offer for Casey's."
The letter, as reported in a Morgan Keegan/CSP Daily News Flash yesterday, is Casey's first recognition of Couche-Tard's attempt to elect its own slate of candidates to the Board of Directors.
As previously reported in CSP Daily News Couche-Tard president and CEO Alain Bouchard has accused the Casey's Board of Directors of misleading its shareholders and said Couche-Tard's proposed candidates will work in the best interests of those shareholders.
"Though it remains our strong preference to enter into a negotiated transaction with Casey's, we are committed to pursuing a combination of our two companies," Bouchard said in June. "We are confident that these nominees will serve in the best interests of Casey's and its shareholders."
In his letter, Myers paints a different picture.
"Under the leadership of our current board, Casey's is already creating far greater value for shareholders than is reflected in Couche-Tard's offer," he said. "We urge you to discard any blue proxy cards you receive from Couche-Tard and vote the enclosed white proxy card today."
Myers' letter goes on to describe Casey's recent "strong" performance and detail the company's current self-tender of stock available to shareholders, while accusing Couche-Tard of "attempting to capture the significant value at Casey's that rightly belongs to you."
"The Casey's board unanimously recommends that you vote 'for' the highly qualified slate of Casey's directors named on the enclosed white proxy card and 'against' Couche-Tard's bylaw amendment repeal proposal," the letter states. "The Casey's board also urges you to discard any blue proxy card sent to you by Couche-Tard or its affiliates. Even a vote against Couche-Tard's nominees on Couche-Tard's blue proxy card will cancel any previous proxy submitted by you."
Click the "Download Now" button below to read Myers complete letter to shareholders.
Meanwhile, Couche-Tard issued a statement yesterday calling Casey's private placement of $569 million in 5.22% senior notes to fund its leveraged recapitalization.
Casey's recent action to transfer value from the Casey's shareholders to noteholders is outrageous, Couche-Tard wrote. In our view, the private placement of notes recently completed by Casey's, which has a costly and unusual 'poison put' feature in favor of the noteholders, is designed to entrench the Casey's board and management at the expense of the Casey's shareholders.
Under the 'poison put' feature associated with the notes, Casey's is required to pay the noteholders approximately $95 million in penalties based on current treasury rates, in addition to the outstanding principal amount and accrued interest on the notes, if any party acquires 35% or more of the outstanding shares of Casey's. The financing makes it almost $2 per share more expensive to acquire Casey'sthat is $2 that could have gone to the shareholders but instead is designated for noteholders in the event of any such acquisition.
Couche-Tard added, Despite our best efforts, Casey's board and management team continue to refuse to negotiate with Couche-Tard. Casey's has not allowed us to conduct any due diligence and has taken actions to impede our premium offer, including undertaking the leveraged recapitalization with costly and unusual financing, commencing costly and meritless litigation against Couche-Tard, adopting a poison pill, and putting in place lucrative golden parachute arrangements for executives of Casey's. The shareholders of Casey's deserve a board and management team that will act in the best interests of the Casey's shareholders.
Casey's annual meeting, when a new Board of directors would be seated, is scheduled for Thursday, Sept. 23.
Casey's, based in Ankeny, Iowa, has 1,513 corporate stores in nine states.
Couche-Tard, Laval, Quebec, is the leader in the Canadian convenience store industry. In North America, Couche-Tard operates a network of 5,883 c-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.
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