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WSJ on Couche-Tard Takeover Tactics

NEW YORK -- In Casey's General Stores Inc.'s recommendation to shareholders to reject the $36 per share offer by Alimentation Couche-Tard, it claimed the Canadian retailer was using "questionable tactics," including selling the majority of its 3.9 percent stake it held of Casey's. But according to a column by The Wall Street Journal editor John Jannarone, it wasn't unusual for Couche-Tard to own a stake in Casey's General ahead of launching a bid.

Days before making its offer public on April 8, Couche-Tard increased its stake in Casey's to 3.9 percent, purchasing stock at $31.44, he wrote. When the offer for Casey's was made public, Casey's shares jumped over the offer price, as is common in takeover attempts, according to Jannarone. This gave Couche-Tard the chance to sell all but a few of its shares at $38.43, netting at least $10 million in profit, the report stated.

According to Jannarone, the 3.9 percent stake it had probably wasn't enough to swing the balance, even though Couche-Tard has nominated a slate of directors for election to Casey's board who will recommend its deal.

And Couche-Tard kept a token interest in Casey's to possibly launch a proxy contest, he wrote.

However, if the takeover attempt fails, Couche-Tard won't be hurt by a decline in Casey's share price, as it already booked millions of dollars in profit to help cover its advisory fees, according to the report.

Some investors have sold their stake since Couche-Tard's trades were made public, and Casey's shares slid back below $36, Jannarone noted.

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