Couche-Tard Raises Bid

Alimentation Couche-Tard Inc. has increased its tender offer for Casey’s General Stores to $38.50 per share in cash, as Casey’s responds by advising its shareholders not to take any action as it reviews the revised bid.

The revised offer of $38.50 is $0.50 per share higher than the price at which a majority of outstanding Casey’s shares were tendered in Casey’s recent self-tender, and it implies a total enterprise value of approximately $2.0 billion on a fully diluted basis, including net debt of Casey’s of approximately $528 million.

The offer represents a 32% premium over the one-year average closing share price of Casey’s as of April 8, 2010 (the last trading day prior to the public disclosure of Couche-Tard’s proposal), a 26% premium over the 90-calendar day average closing share price of Casey’s as of April 8, 2010, and a 22% premium over the closing price of $31.59 per share of Casey’s on April 8, 2010. Couche-Tard’s increased offer also represents a 17% premium to the all-time and 52-week high trading price of common stock of Casey’s prior to April 8, 2010.

“In raising our offer, we have taken into account the views of the Casey’s shareholders and our goal of completing a transaction that makes compelling strategic sense for both companies,” said Alain Bouchard, president and CEO of Couche-Tard. “In Casey’s self-tender offer, the shareholders of Casey’s made clear their views on the value of Casey’s. The fact that a majority of the then-outstanding shares of Casey’s were tendered at $38.00 per share demonstrates that our revised offer to acquire 100% of the outstanding shares of Casey’s for $38.50 per share in cash is compelling. We believe that our revised offer is the most attractive strategic alternative available to the Casey’s shareholders, and delivers immediate cash value superior to what Casey’s can deliver continuing as a standalone company. We remain ready, willing and able to complete a transaction with Casey’s expeditiously and urge the Casey’s Board of Directors to begin discussions with Couche-Tard immediately to maximize value for the Casey’s shareholders and make this combination a reality.”


Couche-Tard’s Acquisition Financing

Couche-Tard also announced that it has secured financing for the deal, having entered into a credit agreement with a consortium of Canadian and international financial institutions led by The Bank of Nova Scotia, HSBC Bank Canada, Caisse de dépôt et placement du Québec and Rabobank Nederland, Canadian Branch, which has agreed to provide up to $1.5 billion in funds pursuant to a four year unsecured term loan facility. The term loan facility, together with Couche-Tard’s existing credit facilities and cash on hand, will be used to finance Couche-Tard’s tender offer to acquire all of the outstanding shares of common stock of Casey’s.

“As we have said all along, Couche-Tard is making its offer from a position of financial strength,” Bouchard said. “Our new financing agreement underscores the seriousness of our offer and our deep commitment to making a combination with Casey’s a reality. In contrast to assertions made by Casey’s, we obtained financing on terms significantly more favorable than the terms of the notes issued by Casey’s to finance its leveraged recapitalization plan, despite Couche-Tard’s higher leverage and the leverage of a combined Couche-Tard and Casey’s on a pro forma basis. Couche-Tard’s financing does not require a make-whole payment at the expense of shareholders in any event. As we have previously pointed out, the ‘poison put’ provision in the notes issued by Casey’s, if enforceable, makes it approximately $110 million more expensive to acquire Casey’s (based on current treasury rates), which equates to approximately $2.88 per share (after giving effect to the Casey’s recapitalization), and thereby detracts from the value that may be received by the Casey’s shareholders.”


Casey’s Responds

In response to Couche-Tard’s revised bid, Casey’s General Stores today advised its shareholders not to take any action regarding the revised tender offer.

Casey’s Board reported that “consistent with its fiduciary duties, and in consultation with its financial and legal advisors,” it planned to review the revised tender offer and make a recommendation to shareholders “in due course.”

The Casey’s Board of Directors has rejected prior Couche-Tard tender offers of $36.00 per share and $36.75 per share on June 8, 2010 and July 28, 2010, respectively, and recommended that shareholders not tender their shares.

Goldman, Sachs & Co. is acting as financial advisor to Casey’s, and Cravath, Swaine & Moore LLP and Ahlers & Cooney, PC are providing legal advice.




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