ANKENY, Iowa -- Casey's General Stores Inc. has submitted an initial bid for Kroger's nearly 800-unit, $4 billion convenience-store network under pressure from an activist investors group, according to a CNBC report citing sources familiar with the situation.
The Kroger Co. announced in October 2017 that it would explore strategic alternatives for its c-store business, including a potential sale following a review of “assets that are potentially of more value outside of the company than as part of Kroger,” the supermarket company said.
Kroger has not yet announced a decision on whether it will sell the c-stores.
JCP Investment Management LLC, BLR Partners LP and Joshua E. Schechter, a group of Casey’s shareholders that together own about $45 million worth of the retailer’s stock, in early January issued an open letter to all Casey's shareholders suggesting that the chain is “significantly undervalued.” It urged the board to “immediately engage a financial adviser to explore all strategic alternatives, including a potential sale, merger or similar transaction in order to maximize shareholder value.”
While it has acknowledged JCP's letter, Casey's has not announced whether or how it will react.
Buying Kroger's c-store business, which includes about 785 locations in 18 states under the Turkey Hill, Loaf ‘N Jug, Kwik Shop, Tom Thumb and Quik Stop banners, could stave off pressure to sell the chain, the sources told the news outlet.
Neither Ankeny, Iowa-based Casey’s nor Cincinnati-based Kroger responded to CSP Daily News requests for comment by posting time.
Casey's owns and operates more than 2,000 c-stores in 15 states.