Casey's Adopts Poison Pill to Thwart Couche-Tard Takeover

The board of directors of Casey's General Stores approved a plan to prevent a hostile takeover of the Ankeny, Iowa-based convenience store chain, which is currently a subject of interest of Canadian c-store company Alimentation Couche-Tard Inc.

A shareholder rights agreement, filed with federal regulators, will go into effect if any one shareholder obtains 15 percent of the company. Once triggered, the agreement, among other things, gives all Casey's shareholders except the "acquiring person" the right to purchase new stock at one-half the market price. As of early last month, BlackRock Institutional Trust Co. was the company's largest single investor.

In published reports, Bill Walljasper, Casey's chief financial officer, called the action "a very customary step in a hostile takeover," one that will create "a dilutive factor" and make a deal more expensive for any potential buyer.

In April, Couche-Tard revealed an attempt to purchase the Midwest convenience store chain with an unsolicited $36 per share bid, which Casey's board unanimously rejected. When making the offer public, Couche-Tard hinted at pursuing a hostile takeover if negotiations were not possible.

"What this basically does is prevent Couche-Tard from making any kind of a tender offer for Casey's shares," J. Justin Akin, senior equity analyst with River Road Asset Management in Louisville, Ky., said in published reports. "It forces them to deal with Casey's board rather than Casey's shareholders."

Couche-Tard responded to the shareholder right agreement, calling again for negotiations.

"Our senior management team and legal and financial advisors remain ready to meet with Casey's and its representatives at their earliest convenience to discuss our proposal in detail," a company spokesperson said in an e-mailed statement. "A meeting would be more productive than putting roadblocks, like a poison pill, in the path of our compelling proposal."
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