Casey's Submits Bid for Kroger's C-store Business

ANKENY, Iowa — Casey's General Stores Inc. submitted an initial bid for The Kroger Co.'s roughly $2-billion convenience store portfolio.

As CNBC reported, the move was made under pressure from JCP Investment Management, which pushed for a strategic review of the company in an open letter to Casey's shareholders on Jan. 3, according to inside sources.

JCP, BLR Partners and investor Joshua Schechter collectively own $45 million of Casey's common stock as of Jan. 3. Casey's has a market capitalization of $4.6 billion.

If Casey's acquired Kroger's c-store holdings, which operate under the Turkey Hill Minit Markets, Loaf 'N Jug, Kwik Shop, Tom Thumb and Quik Stop brands, it could hold off investor pressure to sell, the sources said.

Cincinnati-based Kroger announced that it would conduct a strategic review of its c-store holdings in October 2017, as CSNews Online reported. In December, the company stated that the potential sale had generated a "high level of interest" from prospective buyers.

Casey's President and CEO Terry Handley previously discussed the company's growth plans during its earnings call for the second quarter of fiscal 2018, noting that "the acquisition pipeline continues to expand, which further complements the accelerated growth in our new store construction activity."

Multiple other parties are reportedly looking to buy Kroger's c-store portfolio aside from Casey's, which is working with an investment bank. Final offers in the sale process are due in early February.

CNBC's sources requested anonymity because the information about Casey's bid is confidential, the news outlet said.

Casey's declined to comment on the report of its offer.

Ankeny-based Casey's General Stores owns and operates more than 2,000 convenience stores in 15 states. It owns and operates two distribution centers, delivering approximately 90 percent of in-store products as well as approximately 75 percent of the fuel sold at its convenience stores.