7-Eleven Inc. has confirmed that discussions with Casey’s General Stores Inc. regarding a potential transaction have terminated.
7-Eleven made a preliminary proposal of $40 per common share for a consensual transaction on Sept. 2, 2010. After completing additional due diligence, 7-Eleven raised its offer to $43 per common share. 7-Eleven believes its revised proposal fairly values Casey’s.
“While we are no longer in talks with Casey’s regarding a transaction, our strategy is to grow aggressively in the U.S. and Canada. We will continue to pursue transactions that make sense for our company to maximize shareholder value,” stated Joe DePinto, 7-Eleven’s president and CEO. “Expanding our store base enables us to further leverage our merchandising expertise, proprietary distribution network and scale in order to provide more convenience to our customers,” added DePinto.
The U.S. convenience store industry is highly fragmented with the majority of the industry comprised of small chains or independent owners. As consolidation in the convenience store industry has increased, 7-Eleven has ramped up its merger and acquisition efforts, closing several deals in 2010. In addition to acquisitions, the company is focused on its Business Conversion Program (BCP), a conversion of existing convenience stores to the 7-Eleven brand, and organic growth.
“7-Eleven has the size, scale and financial flexibility to aggressively increase its store base over the next several years,” stated Stan Reynolds, 7-Eleven’s executive vice president and chief financial officer. “We have a strong balance sheet, solid operating results and the resources to add significantly to our asset base. We intend to grow while maintaining a disciplined investment approach and a conservative capital structure.”
7-Eleven expects to add over 300 stores in 2010 throughout the U.S. and Canada. The company operates, franchises or licenses more than 8,200 stores in North America.