Laval, Quebec-based Couche-Tard could once again extend its $36.75 offer should it fail to acquire enough shares in the Ankeny, Iowa-based convenience store chain, said the report.
Earlier this month, Couche-Tard extended its offer by more than [image-nocss] three weeks after about 12% of Casey's shares were tendered. That marked a decrease from the 19.2% that previously agreed to tender.
A similar extension would bring the deadline to near the September 23 date for Casey's annual meeting.
Couche-Tard could also refuse to extend the offer and walk away from the battle, the report said. Or it could put all its hopes on acquiring the 1,531-store chain in its efforts to elect a slate of director nominees that would be willing to negotiate a deal.
Since Couche-Tard's last offer extension, Casey's has completed its own tender offer that will see it spend $500 million to purchase nearly 26% of its own shares for $38 each.
Industry analysts believe Couche-Tard's efforts to acquire Casey's is looking more unlikely, said the news agency. Irene Nattel of RBC Capital Markets said CEO Alain Bouchard's tone about the takeover was "slightly less enthusiastic" during last week's quarterly results conference call than it had been in the past.
While the acquisition would be highly accretive, Couche-Tard's demonstrated discipline with acquisitions suggests it will not substantially increase its bid. "At this point, with actions between the two sides becoming increasingly hostile and given the fundamental outlook for Casey's, we view a successful conclusion of this situation as somewhat unlikely," she wrote in a report.
But with the c-store industry remaining highly fragmented, Nattel said Couche-Tard would pursue other targets should the effort for Casey's fail.
While the Casey's acquisition promises to be the buzz at the meeting, shareholders will also be pleased with Couche-Tard's performance, including strong earnings last fiscal year and in the first quarter. Couche-Tard beat expectations when its profits in the quarter surged 42% to a record $129.5 million as it benefited from higher merchandise sales, fuel margins and continued expense control.
(Click here for previous CSP Daily News coverage of the Casey's/Couche-Tard saga.)
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.
Casey's has 1,531 stores as of June 30, 2010. The 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.
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.