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Proxy Firms Support Pantry & Couche-Tard Combo

CARY, N.C. — The pending merger between The Pantry Inc. and Alimentation Couche-Tard Inc. received a nod of approval from two proxy advisory firms.

Institutional Shareholder Services Inc. (ISS) and Glass Lewis & Co. have recommended that The Pantry's stockholders vote in favor of the agreement and plan to merge with a U.S. subsidiary of Couche-Tard. The company's stockholders will cast their votes at a special meeting on March 10.

"A vote for this transaction is warranted in light of the reasonable premium, the certainty of value inherent in the cash nature of the consideration, and the board's rationale regarding the standalone challenges represented by the company's current debt profile, capital needs and increased sector competitiveness," ISS stated in its report released Feb. 25.

Glass Lewis, in its report issued a day earlier, reached a similar conclusion stating: "We believe shareholders should support the contemplated buy-out."

In addition to the advisory firms, The Pantry's board of directors unanimously recommended that stockholders vote for the proposed merger with Couche-Tard and other matters to be considered at the special meeting. Stockholders of record as of the close of business on Feb. 3 are entitled to vote at the special meeting either in person or by proxy.

The parties currently expect to complete the proposed merger promptly following approval by the stockholders, subject to the satisfaction of the other conditions set forth in the merger agreement, including the receipt of necessary governmental or regulatory approvals.

BofA Merrill Lynch is acting as exclusive financial advisor to The Pantry. Willkie Farr & Gallagher LLP and Smith Anderson are acting as legal advisors to The Pantry.

The Pantry and Couche-Tard inked the merger agreement in December. Under the terms of the deal, Canada-based Couche-Tard will acquire The Pantry in an all-cash transaction valued at $36.75 per share, with a total enterprise value of approximately $1.7 billion including debt assumed. The terms were unanimously approved by the boards of directors of both organizations. 

The Pantry, based in Cary, operates approximately 1,509 stores in 13 southeastern states under select banners, including Kangaroo Express, its primary operating banner. 

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