US convenience chain Casey’s General Stores is adopting a shareholder rights agreement in its bid to halt the hostile takeover advances of Canadian c-store giant Couche-Tard.
Casey’s has stipulated that once any single shareholder obtains a 15% stake in the company, all other shareholders – excluding the majority stockholder – would then have the right to purchase new stock in the company at half the market price.
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The company also plans to designate a new series of preferred shares as part of the shareholder rights agreement, Casey’s said in a regulatory filing with the US Securities and Exchange Commission.
The so-called “poison pill” defence typically looks to block a hostile takeover by making it prohibitively expensive for the acquiring company by flooding the market with new shares. Casey’s board will also hope that the agreement will make Couche-Tard’s approach less appealing to existing shareholders.
The moves come a week after Couche-Tard disclosed a US$1.9bn bid for Casey’s, which was immediately rejected by Casey’s board as opportunistic.
Responding to the news, Couche-Tard again called on Casey’s board to enter into negotiations over a possible takeover.
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By GlobalData“A meeting would be more productive than putting roadblocks, like a poison pill, in the path of our compelling proposal,” Couche-Tard said.
