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.

According to Casey's president and CEO Robert Myres, ''the recapitalisation plan was successful on every level.''

Couche-Tard said that its revised offer of $38.50 per share is 0.50 per share higher than the Casey's recent self-tender and represents a 32-per cent premium over the one-year average closing share price of Casey's as of 8 April 2010, the last trading day prior to the public disclosure of Couche-Tard's proposal.

Shares in Casey's closed at $38.45 yesterday on Nasdaq, up 2.7 per cent.

Alain Bouchard, President and Chief Executive Officer of Couche-Tard commented, "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.''

Couche-Tard further said that it has tied-up with a consortium of financial institutions for up to $1.5 billion in loans to fund the deal.

Casey's along with its subsidiaries operate over 1,500 convenience stores under the names Casey's General Store, HandiMart and Just Diesel in nine Midwestern states in the US primarily Iowa, Missouri and Illinois.

The products offered through the stores include grocery and other merchandise, food and beverages, and gasoline. The company employs around 19,000 people.

For the fourth quarter ended on 30 April 2010, the store reported revenue of $1.18 billion, up 34 per cent compared to $883 million for the same period last year, and net earnings of $21.9 million, 40 per cent higher than a year ago.

Basic earnings per share for the quarter was $0.43 compared to $0.31 from the same quarter a year ago.

The store operator which is on a sustainable growth path is expected to report strong results for the first quarter ended 31 July 2010 early next week, which could have an implication on its shareholders' final decision.

Goldman, Sachs & Co is acting as financial advisor to Casey's, while Credit Suisse Securities (USA) LLC and UBS Investment Bank are advisors to for Couche-Tard on the proposal.

Quebec-based Couche-Tard operates around 5,880 convenience stores in Canada and the US employing over 53,000 people. Around 4,140 of the stores offer gasoline also in addition to other merchandise. In Canada, it operates under the names Couche-Tard and Mac's and Beckers and in the US as Circle K.