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Mergers & Acquisitions

Casey's Responds to Activist Investors

Retailer 'expects to deliver substantial value for its shareholders'

ANKENY, Iowa --Casey’s General Stores Inc. has reacted to a letter a group of activist investors sent to all of the company's shareholders claiming the convenience-store chain is "substantially undervalued" and seeking a strategic review that could include the sale of the stores.

JCP Investment Management LLC, BLR Partners LP and Joshua E. Schechter collectively own about 1% of Casey’s outstanding shares, according to Casey's.

“Casey’s board of directors and management team welcome and appreciate input from all shareholders. To that end, we met with representatives from JCP this past summer," Terry Handley, president and CEO of Casey’s, said in a press statement responding to the Jan. 3 letter signed by James C. Pappas, managing member of investment firm JCP, Houston.

"During that discussion, they did not raise their recommendation that Casey’s explore strategic alternatives, and there has been no substantive engagement with them since that time,” he said. “However, the board will review the content of their letter thoroughly.”

Handley said Casey’s has a strong track record of delivering value for shareholders. The company’s five-year total shareholder returns (TSRs) of 121% exceed the TSRs of the S&P 500 index (108%) and the S&P Retail index (46%) over the same period.

“The company is focused on generating increased long-term value for shareholders through new initiatives to accelerate same-store growth and returning cash to shareholders through share repurchases and a steadily increasing dividend," said Handley. "With the combination of the company’s growing acquisition pipeline, new-store construction activity, new initiatives aimed at enhancing operations—such as digital engagement and price-optimization projects—Casey’s expects to deliver substantial value for its shareholders.”

With headquarters in Ankeny, Iowa, Casey's owns and operates more than 2,000 c-stores in 15 states. The stores offer self-service gasoline, a wide variety of grocery items and prepared foods, such as made-from-scratch pizza and doughnuts, chicken tenders and made-to-order sub sandwiches. Casey's owns and operates two distribution centers, delivering about 90% of in-store products as well as about 75% of the fuel sold at its stores.

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