Convenience chain rejects latest Couche-Tard bid

Posted: 07.28.2010 at 1:25 PM

ANKENY, IOWA (AP) -- Iowa-based convenience chain Casey's General Stores Inc. has rejected the latest takeover bid from competitor Alimentation Couche-Tard Inc. and announced a recapitalization plan to increase shareholders' value.

Couche-Tard, a convenience store operator based in Canada, has made two offers for the Midwest chain.

Casey's, based in Ankeny, rejected a $36-per-share offer in June. The company said Wednesday that its board unanimously recommends against the latest $36.75 offer as it undervalues the company and is not in its best interests.

Casey's says its $500 million recapitalization plan allows the company to repurchase a substantial portion of its shares by including a modified "Dutch auction," under which shareholders can choose to tender shares at prices from $38 to $40. The offer will be funded by a combination of debt and cash.

Casey's estimates it will be able to repurchase about 25 percent of its 50.97 million outstanding shares. The offer is to begin on Thursday and end Aug. 25.

Couche-Tard says it was disappointed that Casey's board rejected the offer and launched its recapitalization plan without consulting Couche-Tard.

Couche-Tard CEO Alain Bouchard says his company will continue to evaluate its options.

Shares of Casey's rose $1.28, more than 3 percent, to $37.78 by midmorning.