Couche-Tard sweetens bid for Casey’s to $2 billion

Canada's convenience store operator Alimentation Couche-Tard Inc (Couche-Tard) yesterday raised again its offer for the US rival Casey's General Stores Inc (Casey's) to $38.50 per share, in an all-cash deal.

The revised offer implies a total enterprise value of approximately $2 billion on a fully diluted basis, including net debt of Casey's of approximately $528 million, Couche-Tard said in a statement.

As for all previous attempts, Casey's has advised its shareholders not to take any action on Couche-Tard's revised bid, further stating that the company's board will review the offer and make a recommendation to shareholders in due course.

Couche-Tard submitted its initial hostile bid for the takeover of Iowa-based Casey's in April offering $36 per share in cash, which was spurned by Casey's on the grounds that the proposal significantly undervalued the company. (See: Casey's General Stores spurns Couche-Tard's $1.8 billion hostile bid) 

Couche-Tard's subsequent attempt to win over Casey's by raising the ante to $36.75 per share or around $1.87 billion, was also rejected by the company's board in July, which instead approved a $500 million recapitalisation plan to be executed through a modified ''Dutch auction'' self tender offer at a stock price of $38-$40 per share.

Subsequently, Casey's raised $569 million through private placement of 5.22 per cent unsecured notes due 2020, to finance the recapitalisation plan.

Earlier this week, Casey's announced the results of the ''Dutch auction'' self tender offer, accepting for payment of approximately 13.2 million shares which represent approximately 25.8 per cent of the company's outstanding shares, at a purchase price of $38 per share. Following the offer, Casey's expects to have around 37.8 million shares of common stock.