Casey’s Reports Recapitalization Results

Casey’s General Stores Inc. has announced the preliminary results of its modified “Dutch auction” self tender offer, which expired on Aug. 25, 2010 at midnight New York City time, determining the recapitalization was a success.

Based on the preliminary count, a total of approximately 28.2 million shares were validly tendered at the minimum purchase price of $38.00 per share, including 14.0 million shares that were tendered through notice of guaranteed delivery.

Assuming that all guaranteed delivery shares are ultimately delivered, the company expects to purchase a pro-rated amount of 47% of shares from each tendering stockholder, but all shares purchased in the offer will be purchased at the same price.

As such, Casey’s expects to accept for payment an aggregate of approximately 13.2 million shares of its common stock at a purchase price of $38.00 per share, for a total cost of approximately $500 million, excluding fees and expenses related to the offer. The approximately 13.2 million shares expected to be purchased in the offer represent approximately 25.8% of Casey’s shares outstanding as of July 23, 2010.

“Our recapitalization plan was successful on every level,” said Robert Myers, Casey’s president and CEO. It has provided the company with an opportunity to purchase a significant number of shares at an attractive price and has allowed shareholders who held their shares to benefit from the significant long-term value of owning a larger percentage of Casey’s. The financing at a fixed rate of 5.22% for 10 years has allowed us to benefit from historically low interest rates and will drive EPS accretion. We continue to believe that our stock is undervalued at recent trading levels and that Casey’s is creating far greater value than is reflected in Couche-Tard’s inadequate $36.75 per share offer. We look forward to continuing to execute on our strategic growth initiatives.”

Adjusting analysts’ consensus estimates as of July 27, 2010 (the day before Casey’s announced its recapitalization plan) for its anticipated final per share purchase price, anticipated reduction in outstanding shares, additional interest expense and retirement of debt in connection with the recapitalization results in an increased 2011 EPS estimate of $2.72 per diluted share and a 2012 EPS estimate of $3.31 per diluted share.

This represents a 29.9% increase on 2012 EPS estimates reported since April 8, 2010 (the day prior to the public announcement of Couche-Tard’s unsolicited 2 proposal). Assuming the recapitalization occurred at the beginning of Casey’s 2011 fiscal year, the 2011 EPS estimate would be increased to $2.91 per diluted share, a 28.7% increase since April 8, 2010.

The final results of the offer will be determined subject to confirmation by the depositary of the proper delivery of the shares validly tendered and not withdrawn and will be announced on the fourth business day after the close of the Offer. The actual number of shares to be purchased, the proration factor and the price per share will be announced following the completion of the confirmation process. Payment for the shares accepted for purchase, and return of all other shares tendered and not purchased, will occur promptly thereafter.

Stockholders and investors who have questions or need information about the offer may contact the Information Agent for the offering, MacKenzie Partners at (212) 929-5500 or (800) 322-2885.

Goldman, Sachs & Co. is acting as financial advisor to Casey’s, and Cravath, Swaine & Moore LLP and Ahlers & Cooney, PC are providing legal advice.

 

 

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