* Says about 1.1 pct of outstanding Casey's shrs tendered
* Says terms of offer unchanged
(Adds analyst's comments, details. In U.S. dollars unless
By Solarina Ho
TORONTO, Aug 31 Canada's Alimentation
Couche-Tard Inc (ATDb.TO) said on Tuesday it was extending its
$1.88 billion takeover offer for U.S. convenience store chain
Casey's General Stores (CASY.O) by a month.
The offer, which would have expired on Monday, will now end
Sept. 30. All other terms and conditions of the offer are
In July, Couche-Tard, Canada's largest convenience store
operator, sweetened its bid for Casey's to $36.75 a share, or
$1.88 billion. The hostile takeover fight has escalated since
Couche-Tard made its initial $36 a share, or $1.85 billion,
offer in April. [ID:nN31229554]
Couche-Tard said that as of Aug. 30, 546,435 Casey's common
shares, about 1.1 percent of all its outstanding shares, were
tendered and not withdrawn pursuant to the offer.
"Even 1 percent is kind of a surprise," said analyst
Michael Broudo of Miller Tabak & Co.
Last week, Casey's -- a U.S. Midwest chain that operates
more than 1,500 stores -- concluded a $500 million
recapitalization plan in which it agreed to buy back about 13.2
million shares at $38 a share.
"No one is going to tender into Couche-Tard at $36.75 when
the company bought back stock at $38. They just did a Dutch
tender, which had the impact of increasing earnings per share
by 30 percent (by fiscal year 2012)," Broudo said.
The buyback offer, designed to thwart the Couche-Tard bid,
evoked a strong response, with 28.2 million shares -- more than
50 percent of its outstanding shares -- being tendered, Casey's
"Given that Casey's is already creating more value than is
reflected in the Couche-Tard offer ... we are not surprised
that so few shares have tendered into Couche-Tard's inadequate,
highly conditional $36.75 per share offer," Casey's said in a
statement on Tuesday.
In a research note on Tuesday, Desjardins Securities
analyst Martin Landry estimated the new cost of acquiring
Casey's would be about $38.90 a share, given the $500 million
debt incurred from the recapitalization plan and the roughly
$95 million change of control penalty embedded in Casey's
Couche-Tard, which operates 5,800 stores across North
America, is also fighting a proxy battle to replace Casey's
board at the annual shareholders meeting on Sept. 23.
"I imagine they had to extend, just to save face and at
least extend through the results of the annual meeting," Broudo
said. "I can't imagine that they have a very good chance of
winning any board seats right now."
Alimentation Couche-Tard shares were up 6 Canadian cents at
C$23.02 on the Toronto Stock Exchange early on Tuesday
afternoon. Casey's General Stores was up 7 cents at $37.97 on
(Additional reporting by Isheeta Sanghi in Bangalore; editing
by Peter Galloway)