The state government agency is led by president Roy Rogers, an Oklahoma state trooper and Vietnam war veteran. It is a longtime Casey's investor with a current position of 7,000 shares, said the report. The group administers retirement and medical benefits on behalf of Oklahoma law enforcement personnel.
The agency takes aim at Casey's recent recapitalization plan, the report said. Under the program, Casey's raised $569 million in a private placement with a group of insurance companies earlier this month and is using the money to buy back up to a quarter of its 50.97 million outstanding shares at a price of between $38 and $40 per share.
"This defensive measure wastes company resources and assets," the police group said in the class-action petition cited by the newspaper. The petition was filed with the Iowa District Court on August 9. It argues that the modified Dutch auction reaches out to only 25% of Casey's shareholders.
"The director defendants are using cash rightfully belonging to Casey's and its shareholders for their own purposes, causing the company to buy back stock that Couche-Tard might otherwise acquire so that [they] can maintain control of Casey's," the complaint stated. "Had the board truly believed that Couche-Tard's revised offer was 'undervalued,' [it] should have negotiated for a higher price from Couche-Tard."
In a filing with securities regulators Monday, Casey's said its board believes the claims are without merit and that it intends to defend against them vigorously.
Three other investor groups have launched separate class-action suits against Casey's and its board members. Each has made similar accusations, said the reportthat Casey's directors have breached their fiduciary duties to Casey's shareholders by refusing to negotiate with Couche-Tard.
Laval, Quebec-based Couche-Tard has said that it tried repeatedly to engage Ankeny, Iowa-based Casey's management in merger talks before launching an unsolicited takeover offer of $36 per share in April. It has since raised the bid to $36.75, taking its offer directly to investors in a tender offer that expires August30.
In a letter to Casey's shareholders filed with the U.S. Securities & Exchange Commission (SEC) last week, Couche-Tard CEO Alain Bouchard leveled some of the same criticisms at Casey's board as those mentioned in the class-action suits. "We believe that you deserve a board of directors that is answerable to you and that will act in your best interests," he wrote.
Couche-Tard has vowed to try to replace the Casey's board with its own slate of directors at the company's annual meeting September 23.
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 (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 name) covering all 10 provinces.
Casey's 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.
Casey's has 1,531 stores as of June 30, 2010. Approximately 61% of all the stores are located in areas with populations of fewer than 5,000 persons, while approximately 14% of our stores are located in communities with populations exceeding 20,000 persons. It said that it seeks to meet the needs of residents of smaller towns by combining features of both general store and c-store operations. Smaller communities often are not served by national-chain c-stores, it added.
(Click here for previous CSP Daily News coverage of the Casey's/Couche-Tard saga.)
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