US convenience store operator Casey's General Stores Inc (Casey's) yesterday turned down a hostile takeover bid by Canadian rival Alimentation Couche-Tard Inc (Couche-Tard) on the grounds that the proposal significantly undervalues the company and is not in the best interests of its shareholders.
Last month, Couche-Tard had submitted an all-cash offer to acquire Casey's for $36 a share, valuing the store chain at approximately $1.8 billion. The offer represents a 14-per cent premium over the closing price of $31.59 for Casey's shares on Thursday on Nasdaq.
On Friday's trades, shares in Casey's surged 24 per cent to close at $39.10.
Through a public communication sent to Alain Bouchard, president and CEO of Couche-Tard, Casey's president and CEO Robert Myres said that Couche-Tard's proposal is opportunistic and attempts to capture the significant long-term value of Casey's that rightly belongs to its shareholders.
Further, Myres pointed out that Couche-Tard's proposed 14 per cent premium over Casey's closing stock price Thursday, underscores that it is attempting to acquire US companies on the cheap.
''Casey's has navigated the downturn successfully and is extremely well positioned to benefit as the economic recovery continues,'' Myres said.