ClearBridge Advisors, A New York investments firm with a large stake in Casey’s General Stores is encouraging the Ankeny, Iowa-based convenience store chain to hold talks with Couche-Tard.
In a letter written Monday, ClearBridge Advisors said Casey’s owes it to shareholders to determine whether Alimentation Couche-Tard Inc. would raise its $36-per-share offer.
“We agree that the offer does not adequately capture the full earnings power and potential of Casey’s when optimally capitalized,” the letter said. The letter went on to say the offer doesn’t account for the revenue synergies and cost savings a combination of Casey’s and Couche-Tard would create.
But ClearBridge noted it is the fiduciary duty of Casey’s management and board to negotiate with Couche-Tard in good faith and act in the best interest of Casey’s shareholders.
The letter from Brian Angerame, Derek Deutsch, Aram Green, Peter Hable and Jeffrey Russell of ClearBridge noted that participating in talks with Couche-Tard’s regarding the offer doesn’t mean the Casey’s board of directors can’t ultimately reject Couche-Tard’s offer or act on alternatives that might arise from negotiation.
“Conversely, the (Casey’s) board’s intransigence discourages a higher offer and could result in shareholder wealth destruction should the Couche-Tard offer be withdrawn or not accepted by shareholders,” the letter said.
ClearBridge has 810,739 shares of Casey’s common stock out of about 50.9 million shares outstanding, and nearly six million shares reserved for issuance.
