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Ankeny, Iowa Casey’s General Stores advised shareholders to reject a sweetened takeover offer from Canada’s Alimentation Couche-Tard, saying a third party made a higher offer for the U.S. convenience store chain.
The third party, which Casey’s didn’t name, has made a preliminary bid of $40 a share, according to a statement. While that offer also fails to reflect the stock’s value, the board has authorized discussions with the potential bidder to see if the parties can reach an agreement, Casey’s said. The offer would value the chain at more than $2 billion.
Casey’s said Tuesday that its board of directors has unanimously recommended against Couche-Tard’s revised tender offer to acquire Casey’s for $38.50 per common share. In an amended SEC filing, the c-store operator said that Couche-Tard’s revised offer substantially undervalues Casey’s and “is not in the best interests of Casey’s, its shareholders and other constituencies.”
Casey’s has rebuffed Couche-Tard’s overtures since April, forcing the Canadian c-store chain to raise its offer twice in an effort to sway the board.
In related news, Casey’s reported its fiscal first-quarter results on Tuesday. Earnings for the quarter dropped to $37.2 million, compared with earnings of $44.2 in the year-ago period.
Results were impacted by legal fees of $6.2 million associated with the Couche-Tard attempted takeover.
Total revenue for the quarter rose to $1.4 billion, compared with $1.2 billion a year earlier. Same-store sales merchandise sales rose 2%.
During the first quarter, Casey’s began construction on 13 new stores and nine replacement stores, and acquired one store and completed one new-store construction.
“We are very encouraged by the acquisition environment and the fact that we have signed commitments for an additional 52 stores. This puts us ahead of schedule in achieving our fiscal 2011 goal of increasing the total number of Casey’s stores by 4% to 6% and we expect to announce additional acquisitions in the near future. We remain very optimistic about our future growth potential,” said Michael J. Myers, president and CEO.