Alimentation Couche-Tard mails letter to shareholders of Casey's and files
definitive proxy materials
ATD.A, ATD.B / TSX
LAVAL, QC, Aug. 19 /CNW Telbec/ - Alimentation Couche-Tard Inc. ("Couche-Tard") today mailed a letter to the shareholders of Casey's General Stores, Inc. ("Casey's") (NASDAQ: CASY) along with its definitive proxy materials in connection with the 2010 annual meeting of shareholders of Casey's to be held on September 23, 2010. Couche-Tard is soliciting votes to, among other things, elect its slate of eight highly qualified, independent candidates to the Casey's board of directors.
Alain Bouchard, President and Chief Executive Officer of Couche-Tard commented, "We are confident our candidates for the Casey's Board will bring independent oversight and exercise independent judgment in considering our all-cash offer. Without our offer, and especially given the impediments placed by Casey's in the path of any change of control transaction, we firmly believe that the shareholders of Casey's should expect that opportunities to realize a significant premium for their shares of common stock of Casey's will be non-existent in the near future. We urge the Casey's shareholders to send a clear and strong message to their Board that the Casey's shareholders want directors who will act in their best interests by voting FOR our highly qualified candidates at the Casey's annual meeting."
The full text of the letter sent today to shareholders of Casey's follows:
August 19, 2010
Dear Casey's General Stores Shareholder:
Alimentation Couche-Tard Inc. ("Couche-Tard") is North America's largest
convenience store owner in terms of company-operated stores and has a
network of 5,878 stores located in 43 States and in the District of
Columbia and in all ten provinces of Canada. Couche-Tard operates such
stores under its proprietary brands Circle K(R), Mac's(R) and
Couche-Tard(R). Couche-Tard has offered to acquire all of the outstanding
shares of common stock of Casey's General Stores, Inc. for $36.75 per
share in cash. We are writing directly to you because, despite our
repeated attempts to engage in a dialogue with Casey's, your Board of
Directors (the "Casey's Board") has thus far refused to negotiate with
Couche-Tard, not allowed us to conduct any due diligence and taken
actions to impede our premium offer.
It is important that the shareholders of Casey's, as the real owners of
the Company, decide for themselves the merits of Couche-Tard's all-cash
premium offer without obstruction or obfuscation by the Casey's Board.
At the September 23, 2010 Annual Meeting of Shareholders of Casey's, you
will have the opportunity to elect eight new, independent and qualified
directors nominated by Couche-Tard who are committed to maximizing value
for all shareholders of Casey's. We are confident our director nominees
will bring independent oversight and accountability to the Casey's Board
and exercise independent judgment in considering our all-cash premium
offer.
Please vote TODAY by telephone, by Internet or by signing, dating and
returning the enclosed BLUE proxy card in the postage-paid envelope
provided.
COUCHE-TARD'S $36.75 PER SHARE CASH OFFER PROVIDES AN IMMEDIATE CASH
PREMIUM AND A HIGHLY ATTRACTIVE MULTIPLE FOR YOUR INVESTMENT IN CASEY'S
Our compelling $36.75 per share all-cash offer provides you with the
opportunity to realize immediate cash premium value for your investment.
Consider the following:
- Couche-Tard's offer is higher than the all-time high of the common
stock of Casey's prior to our announcement. Couche-Tard's all-cash
offer represents a premium of:
- 26% over the one-year average closing share price of common stock
of Casey's as of April 8, 2010;
- 20% over the 90-calendar day average closing share price of common
stock of Casey's as of April 8, 2010;
- 16% over the closing price of common stock of Casey's on April 8,
2010, the last trading day prior to the public disclosure of
Couche-Tard's offer; and
- 12% to the all-time and 52-week high trading price of common stock
of Casey's trading prior to our announcement.
In stark contrast, the mean initial offer price for all-cash unsolicited
offers since 1997, with a transaction value greater than $1 billion, is a
31% discount to the all-time high, and a 6% discount to the 52-week high,
of the respective target companies' common stock trading prices.
- Couche-Tard's offer represents a multiple of 7.2x trailing EBITDA. At
the time we first publicly disclosed our interest in Casey's in early
April, shares of common stock of Casey's traded at 5.6x CY2011E EBITDA
(based on IBES), which was the same as the average multiple of
Casey's' peers, namely The Pantry, Inc., Alimentation Couche-Tard Inc.
and Susser Holdings Corporation. Both the multiple we are offering and
the adjusted multiple Casey's calculates are at the high end of prior
transactions in the convenience store industry.
- Couche-Tard's offer is even more attractive considering the general
decline in stock values. We believe our offer is even more attractive
considering that stock values in general have fallen since we first
publicly disclosed our offer as a result of, among other things, the
weak economy and poor macroeconomic fundamentals. For instance, since
April 8, 2010, the S&P 500 Index and S&P Retail Index(1) have declined
8% and 11%, respectively. We firmly believe that absent our offer,
Casey's stock price would have traded in line with the declining trend.
- Couche-Tard is confident in its ability to finance this offer. Several
prominent banks have already expressed a willingness to provide
financing to Couche-Tard for the proposed acquisition. We believe the
Casey's shareholders recognize that Couche-Tard is making this offer
from a position of financial strength and that financing this
transaction can be arranged quickly at the appropriate time.
THE RECENT LEVERAGED RECAPITALIZATION PLAN BY CASEY'S IS A DESPERATE
ATTEMPT TO DISTRACT SHAREHOLDERS FROM OUR ALL-CASH PREMIUM OFFER FOR THE
ENTIRE COMPANY
On July 28, 2010, Casey's announced a $500 million leveraged
recapitalization plan to repurchase approximately 25% of Casey's
outstanding shares through a "modified Dutch auction" self-tender offer
at a price of $38 to $40 per share of common stock. We believe this is a
calculated move to financially engineer a temporary increase in Casey's
stock price that fails to increase fundamental value for all Casey's
shareholders.
Since our initial approach to Casey's in October 2009, Casey's has had
more than ten months to consider a range of alternatives to maximize
value for all Casey's shareholders, including identifying potential
acquirers for the entire company. As we have long believed, and the
announcement of Casey's leveraged recapitalization plan confirms, there
are no third parties - financial sponsors or strategic partners - that
are interested in acquiring Casey's, other than Couche-Tard. We believe
that, without our offer and especially given the impediments placed by
Casey's in the path of any change of control transaction, the
shareholders of Casey's should expect that opportunities to realize a
significant premium for their shares of common stock of Casey's will be
non-existent in the near future.
THE COERCIVE FINANCING ARRANGEMENT FOR THE RECAPITALIZATION PLAN
TRANSFERS VALUE FROM SHAREHOLDERS TO NOTEHOLDERS AND IS DESIGNED TO
ENTRENCH MANAGEMENT
In addition to temporarily manipulating the price of common stock of
Casey's, the leveraged recapitalization is a pretext for installing a
coercive financing arrangement with a "poison put" mechanism created to
impede any takeover attempt by any person. The private placement of notes
recently completed by Casey's includes a costly and unusual "poison put"
feature that favors the noteholders, not the shareholders. We believe the
private placement of notes is designed to entrench the Casey's Board and
the management of Casey's at the expense of the Casey's shareholders.
Should the Casey's shareholders decide to replace the Board, this "poison
put" feature associated with the notes requires Casey's to offer to pay
the noteholders approximately $100 million in penalties based on treasury
rates as of August 18, 2010. This unusual penalty is an attempt by
management to take the decision regarding the future of Casey's away from
the Casey's shareholders. The $100 million in penalties is also payable
if Couche-Tard or any other party acquires 35% or more of the outstanding
shares of Casey's.
The financing makes it almost $2 per share more expensive to acquire
Casey's - that is $2 that could have gone to the Casey's shareholders but
instead is designated for noteholders in the event of any such
acquisition. Casey's change of control definition not only has a very low
threshold but also a very high price attached to it. Typically, debt
financing used by companies like Casey's has change of control premiums
in the 1% to 3% range. In stark contrast, the Casey's Board and
management are willing to give a 17% premium to the noteholders, which
represents almost 5% of the company's current equity value (and almost 7%
of the equity value pro forma for the self tender based on current stock
prices) to the noteholders in a desperate attempt to keep their jobs at
the expense of the Casey's shareholders. There are multiple forms of debt
financing that feature change of control premiums far lower than the
egregious 17% premium Casey's accepted.
COUCHE-TARD IS COMMITTED TO MAKING A COMBINATION WITH CASEY'S A REALITY
We have been prepared since the outset of this process to meet with the
Casey's Board, management and advisors to discuss our all-cash premium
offer, answer their questions and execute a mutually acceptable
definitive merger agreement. Despite our best efforts, the Casey's Board
and management team of Casey's continue to refuse to negotiate with
Couche-Tard, have not allowed us to conduct any due diligence and have
taken actions to impede our premium offer, including undertaking the
leveraged recapitalization plan with expensive and unusual financing,
commencing costly and meritless litigation against Couche-Tard, adopting
a poison pill and putting in place lucrative golden parachute
arrangements for Casey's executives. We have committed a significant
amount of time and resources and taken the necessary steps to make a
combination with Casey's a reality regardless of the impediments placed
by Casey's in the path of the proposed transaction.
While it remains our desire to negotiate a mutually acceptable
transaction with the Casey's Board, their refusal to engage in any
dialogue with us has left us with no choice but to take our offer
directly to Casey's shareholders, and to submit an alternate slate of
director candidates to serve on the Casey's Board who we believe will
better represent the interests of all Casey's shareholders.
The Casey's shareholders, the real owners of Casey's, now have the
opportunity to send a strong message to the Casey's Board that it should
stop wasting your money on unnecessary and expensive defensive measures
and begin negotiating a mutually acceptable transaction with Couche-Tard
so that all of you, as shareholders of Casey's, can realize full and
immediate value for your shares.
COUCHE-TARD'S OFFER IS VERY ATTRACTIVE FOR ALL OF CASEY'S CONSTITUENCIES
We continue to firmly believe our offer is very attractive not only for
the shareholders of Casey's but also for other constituencies of both
Casey's and Couche-Tard. Couche-Tard's track record with employees of
companies we have acquired is outstanding. Couche-Tard operates using a
highly decentralized model, and we expect to keep most, if not all, of
the employees of Casey's in place.
Additionally, we are confident the greater scale of a combined
Couche-Tard and Casey's will provide the other constituencies of Casey's
with opportunities beyond what the smaller platform of Casey's currently
can provide. As we noted, Couche-Tard is the largest independent
convenience store operator in North America (whether integrated with a
petroleum company or not) in terms of number of company-operated stores.
Couche-Tard operates a network of 5,878 convenience stores, 4,146 of
which include motor fuel dispensing, located in 11 large geographic
markets, including eight in the United States covering 43 states and the
District of Columbia and three in Canada covering all ten provinces.
Access to Couche-Tard's platform will provide the suppliers of Casey's
with increased opportunities to expand their sales to convenience store
chains within Couche-Tard's portfolio.
In the past, Couche-Tard has always been respectful to local businesses
around the companies it acquired. Our decentralized model has enabled us
to continue the relationships with existing suppliers and vendors. In the
case of Casey's, we already have significant overlap in vendors and do
not expect any material changes in operations.
VOTE FOR NEW, QUALIFIED AND INDEPENDENT DIRECTOR CANDIDATESON THE BLUE
PROXY CARD TODAY
At the end of the day, you, as a shareholder, are the real owner of
Casey's and you will ultimately determine the future of your investment,
but we do not think you will have that opportunity without a change in
the Casey's Board. We are confident that the eight independent nominees
identified on the BLUE proxy card, upon election to the Casey's Board,
will bring independent oversight and accountability to the Casey's Board.
We encourage you to send a clear and strong message to the Casey's Board
that the Casey's shareholders want directors who will act in their best
interests.
Your vote is extremely important. To elect directors who are committed to
looking out for your best interests, please vote TODAY by telephone, by
Internet or by signing, dating and returning the enclosed BLUE proxy card
in the postage-paid envelope provided.
We thank you for your support.
Sincerely,
/s/ Alain Bouchard
Alain Bouchard
President and Chief Executive Officer
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Your Vote Is Important, No Matter How Many Shares You Own.
If you have questions about how to vote your shares on the BLUE
proxy card,
or need additional assistance, please contact the firm
assisting us in the solicitation of proxies:
INNISFREE M&A INCORPORATED
Stockholders Call Toll-Free: (877) 717-3930
Banks and Brokers Call Collect: (212) 750-5833
IMPORTANT
We urge you NOT to sign any White proxy card sent to you by
Casey's.
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About Alimentation Couche-Tard Inc.
Alimentation Couche-Tard Inc. is the leader in the Canadian convenience store industry. In North America, Couche-Tard is the largest independent convenience store operator (whether integrated with a petroleum company or not) in terms of number of company-operated stores. Couche-Tard operates a network of 5,878 convenience stores, 4,146 of which include motor fuel dispensing, located in 11 large geographic markets, including eight in the United States covering 43 states and the District of Columbia, and three in Canada covering all ten provinces. More than 53,000 people are employed throughout Couche-Tard's retail convenience network and service centers. For more information, please visit: http://www.couchetard.com/corporate.
Forward-looking Statements
The statements set forth in this communication, which describes Couche-Tard's objectives, projections, estimates, expectations or forecasts, may constitute forward-looking statements. Positive or negative verbs such as "plan", "evaluate", "estimate", "believe" and other related expressions are used to identify such statements. Couche-Tard would like to point out that, by their very nature, forward-looking statements involve risks and uncertainties such that its results, or the measures it adopts, could differ materially from those indicated or underlying these statements, or could have an impact on the degree of realization of a particular projection. Major factors that may lead to a material difference between Couche-Tard's actual results and the projections or expectations set forth in the forward-looking statements include the possibility that Couche-Tard will not be able to complete the tender offer as expected; Couche-Tard's ability to achieve the synergies and value creation contemplated by the proposed transaction; Couche-Tard's ability to promptly and effectively integrate the businesses of Casey's; expected trends and projections with respect to particular products, services, reportable segment and income and expense line items; the adequacy of Couche-Tard's liquidity and capital resources and expectations regarding Couche-Tard's financial condition and liquidity as well as future cash flows and earnings; anticipated capital expenditures; the successful execution of growth strategies and the anticipated growth and expansion of Couche-Tard's business; Couche-Tard's intent, beliefs or current expectations, primarily with respect to future operating performance; expectations regarding sales growth, gross margins, capital expenditures and effective tax rates; expectations regarding the outcome of various pending legal proceedings; seasonality and natural disasters; and such other risks as described in detail from time to time in the reports filed by Couche-Tard with securities authorities in Canada and the United States. Unless otherwise required by applicable securities laws, Couche-Tard disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking information in this communication is based on information available as of the date of the communication.
Important Additional Information
This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. The tender offer (the "Tender Offer") is being made pursuant to a tender offer statement on Schedule TO (including the Offer to Purchase, Letter of Transmittal and other related tender offer materials) filed by Couche-Tard and ACT Acquisition Sub, Inc. ("ACT Acquisition Sub") with the SEC on June 2, 2010. These materials, as they may be amended from time to time, contain important information, including the terms and conditions of the Tender Offer, that should be read carefully before any decision is made with respect to the Tender Offer. Investors and security holders of Casey's can obtain free copies of these documents and other documents filed with the SEC by Couche-Tard through the web site maintained by the SEC at http://www.sec.gov or by directing a request to the Corporate Secretary of Alimentation Couche-Tard Inc., 4204 Industriel Blvd., Laval, Québec, Canada H7L 0E3. Free copies of any such documents can also be obtained by directing a request to Couche-Tard's information agent, Innisfree M&A Incorporated, at (877) 717-3930.
Couche-Tard and ACT Acquisition Sub filed a definitive proxy statement on Schedule 14A with the SEC on August 19, 2010 in connection with the solicitation of proxies for the 2010 annual meeting of shareholders of Casey's. The definitive proxy statement is being mailed to the shareholders of Casey's on or about August 19, 2010. Investors and security holders of Casey's are urged to read the definitive proxy statement and other documents filed with the SEC carefully in their entirety as they become available because they will contain important information. Investors and security holders of Casey's can obtain free copies of these documents and other documents filed with the SEC by Couche-Tard through the web site maintained by the SEC at http://www.sec.gov or by directing a request to the Corporate Secretary of Alimentation Couche-Tard Inc., 4204 Industriel Blvd., Laval, Québec, Canada H7L 0E3. Free copies of any such documents can also be obtained by directing a request to Couche-Tard's information agent, Innisfree M&A Incorporated, at (877) 717-3930.
Certain Information Regarding Participants
Couche-Tard and ACT Acquisition Sub, its indirect wholly owned subsidiary, and certain of their respective directors and executive officers, and Couche-Tard's nominees for election to the board of directors of Casey's at the 2010 annual meeting of shareholders of Casey's, may be deemed to be participants in the proposed transaction under the rules of the SEC. As of the date of this press release, Couche-Tard is the beneficial owner of 362 shares of common stock of Casey's (which includes 100 shares of common stock of Casey's owned by ACT Acquisition Sub). Security holders may obtain information regarding the names, affiliations and interests of Couche-Tard's directors and executive officers in Couche-Tard's Annual Report on Form 40-F for the fiscal year ended April 25, 2010, which was filed with the SEC on July 19, 2010, and its proxy circular for the 2010 annual general meeting, which was furnished to the SEC on a Form 6-K on July 19, 2010. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the interests of these participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is included in the definitive proxy statement filed with the SEC on August 19, 2010.
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(1) The S&P Retail Index is a capitalization-weighted index of 31
domestic equities in the retail sector, traded on the New York Stock
Exchange, American Stock Exchange and NASDAQ.
For further information: Raymond Paré, Vice-President and Chief Financial Officer, Tel: (450) 662-6632 ext. 4607, [email protected]; Joele Frank, Wilkinson Brimmer Katcher: Matthew Sherman/Eric Brielmann/Eric Bonach, Tel: (212) 355-4449; Innisfree M&A Incorporated: Alan Miller/Jennifer Shotwell/Scott Winter, Tel: (212) 750-5833
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