* Expects to accept about 13.2 mln shares at $38/share
* Says expects 2011 EPS of $2.72
* Sees 2012 EPS of $3.31
(In U.S. dollars unless noted)
By Solarina Ho
TORONTO, Aug 26 Casey's General Stores (CASY.O)
concluded a $500 million recapitalization plan on Thursday that
was designed to thwart a $1.9 billion hostile takeover bid from
Canada's Alimentation Couche-Tard (ATDb.TO) for the U.S.
convenience store chain.
Casey's, a U.S. Midwest chain that operates more than 1,500
stores, said it expected to buy about 13.2 million shares from
its own shareholders at $38 a share as a result of its modified
Dutch auction self-tender offer, which expired on Wednesday.
That represents roughly 25.8 percent of Casey's shares
outstanding as of July 23, 2010.
Casey's buyback offer was substantially higher than
Couche-Tard's latest sweetened offer of $36.75 a share and
sparked a strong response with shareholders tendering 28.2
million shares altogether.
Casey's modified Dutch auction was structured such that
stockholders could tender their shares within the specified
price range of $38 and $40 a share and the price would be
determined based on the number of shares tendered and the
prices specified by the tendering shareholders.
"The recap was a good way for Casey's to fend off
Couche-Tard. It's a good defense mechanism," said Miller Tabak
& Co analyst Michael Broudo.
"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," Casey's Chief Executive Robert Myers in a
Casey's, which has repeatedly spurned Couche-Tard's
advances, said consensus earnings estimates would increase to
$2.72 a diluted share in 2011 and rise to $3.31 a diluted share
in 2012 due to the recapitalization plan.
Couche-Tard, which operates more than 5,800 stores and is
one of North America's largest convenience store operators, has
criticized Casey's for not engaging in discussions.
Couche-Tard's takeover offer expires on Aug. 30. Analysts
have expressed doubt the Montreal-based company will raise it.
"I would think that they had their chance to increase their
bid at a price that would've made sense for everybody. And they
didn't do it. I think they are fiscally very prudent," said
Broudo. "They're almost fiscally prudent to a fault."
Couche-Tard is still running a proxy fight to replace
Casey's board when shareholders meet for their annual meeting
on Sept. 23, but Broudo said: "It's really hard for me to see
what kind of leverage (Couche-Tard has)."
Casey's shares were 18 cents lower at C$37.11 on the Nasdaq
on Thursday midday. Couche-Tard shares were down 13 Canadian
cents at C$22.58 on the Toronto Stock Exchange.
(Reporting by Solarina Ho; editing by Peter Galloway)