UPDATE 2-Casey's may talk to Couche-Tard if it raises bid

Tue Sep 14, 2010 4:19pm EDT

*Says willing to discuss deal with interested parties

*Says $38.50 a share offer no basis for discussion

*To proceed with holding annual meeting on Sept 23

(Adds details, banker quote, stock price. In U.S. dollars)

By Solarina Ho and Pav Jordan

TORONTO, Sept 14 (Reuters) - Casey's General Stores (CASY.O) said on Tuesday it might agree to talks with Alimentation Couche-Tard (ATDb.TO) if the Canadian company would raise its $38.50-a-share takeover offer for the U.S. convenience store operator.

"We are, of course, willing to extend to an interested party the opportunity for discussions regarding a potential consensual transaction, provided that the starting point for such discussions is acceptable," Casey's said.

In a letter to Couche-Tard, which operates 5,800 convenience stores in the United States and Canada, Casey's Chief Executive Robert Myers said the company planned to proceed with its annual meeting on Sept. 23, but that it would continue to evaluate the timing of the meeting.

Couche-Tard has asked Casey's to postpone the meeting, having put forth a list of its own nominees to Casey's board.

The Akeny, Iowa-based chain is already in talks with 7-Eleven, the world's biggest convenience store chain with over 31,400 stores, after the Japanese company offered $2.03 billion, or $40 a share, for Casey's.

A banker familiar with the deal said it would be interesting to see how the Japanese will proceed, noting that they are usually quite slow in making decisions.

"This is one of the best properties available and held by a publicly traded company. So there is some interest," he said.

Casey's, which operates over 1,500 stores in the U.S. Midwest, and Couche-Tard have been embroiled in an increasingly hostile takeover bid.

In the latest exchange between the two companies, Casey's accused Couche-Tard of "increasingly utilizing misrepresentations and mischaracterizations in its public statements," calling them "entirely unfounded and absurd."

Casey's reiterated its objections to Couche-Tard's offer and the accompanying conditions, adding that the Montreal-based company gave no indication as to whether it would waive or withdraw the conditions and that it had not provided enough information about its proposed financing.

Couche-Tard could not be immediately reached for comment.

Casey's letter to Chief Executive Alain Bouchard was in response to a letter from Couche-Tard on Friday that said Couche-Tard was willing to consider raising its bid for Casey's if the process was fair.

Couche-Tard shares closed unchanged at C$23.00 on the Toronto Stock Exchange. Casey's climbed 26 cents to $44.24 on the Nasdaq.

($1=$1.03 Canadian)

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