Couche-Tard Responds To Private Placement

Alimentation Couche-Tard Inc. responded to Casey’s General Stores Inc. announcement that it has completed a private placement of $569 million principal amount of 5.22% Senior Notes due Aug. 9, 2020 to fund its leveraged recapitalization.

“Casey’s recent action to transfer value from the Casey’s shareholders to noteholders is outrageous,” Couche-Tard said in a statement. “In our view, the private placement of notes recently completed by Casey’s, which has a costly and unusual “poison put” feature in favor of the noteholders, is designed to entrench the Casey’s Board and management at the expense of the Casey’s shareholders. Under the “poison put” feature associated with the notes, Casey’s is required to pay the noteholders approximately $95 million in penalties based on current treasury rates, in addition to the outstanding principal amount and accrued interest on the notes, if any 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 shareholders but instead is designated for noteholders in the event of any such acquisition. The Casey’s Board and management are willing to give 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.”

Couche-Tard added that the recapitalization plan is designed to financially engineer a temporary and artificial increase in Casey’s stock price, without increasing fundamental value to the Casey’s shareholders.

“We believe the Casey’s leveraged recapitalization plan confirms there are no other buyers for Casey’s at a price exceeding Couche-Tard’s offer,” Couche-Tard said.

Couche-Tard’s tender offer is scheduled to expire at 5 p.m., New York City time, on Monday, Aug. 30, 2010, unless further extended.

 

 

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