Casey’s General Stores has completed the latest round of defences against its hostile suitor Couche-Tard, when it announced the preliminary results of its modified “Dutch auction” self tender offer.
In a release, the company said that based on the preliminary count by the depositary for the offer, a total of approximately 28.2m shares were validly tendered at the minimum purchase price of US$38 per share, including 14m shares that were tendered through notice of guaranteed delivery.
Assuming that all guaranteed delivery shares are ultimately delivered, the company expects to purchase a pro-rated amount of 47% of shares from each tendering stockholder, but all shares purchased in the offer will be purchased at the same price.
As such, Casey’s expects to accept for payment an aggregate of approximately 13.2m shares of its common stock at a purchase price of $38 per share, for a total cost of approximately $500m. The shares expected to be purchased in the offer represent approximately 25.8% of Casey’s shares outstanding.
Robert Myers, Casey’s president and CEO, said: “Our recapitalisation plan was successful on every level. It has provided the company with an opportunity to purchase a significant number of shares at an attractive price and has allowed shareholders who held their shares to benefit from the significant long-term value of owning a larger percentage of Casey’s.
“The financing at a fixed rate of 5.22% for ten years has allowed us to benefit from historically low interest rates and will drive EPS accretion. We continue to believe that our stock is undervalued at recent trading levels and that Casey’s is creating far greater value than is reflected in Couche-Tard’s inadequate $36.75 per share offer. We look forward to continuing to execute on our strategic growth initiatives.”
The move is the latest salvo in an increasingly hostile pursuit of Casey’s by Couche-Tard. When it was announced, Couche-Tard described the move as a “poison pill” defence and said penalties would be invoked if, for instance, a party buys over 35% of Casey’s – or the US firm’s shareholders decide to replace a majority of its board.