Casey's General Stores
Earlier in the day, Montreal-based Couche-Tard, which operates a string of convenience stores in Canada and the United States, offered $36 a share for Iowa-based Casey's.
That figure was a 14 percent premium over Casey's Thursday closing price of $31.59 on Nasdaq. Shares of the company were up 24 percent at $39.17 on Friday morning.
Couche-Tard said its offer for Casey's, which operates more than 1,500 convenience stores in the U.S. Midwest, was worth about $1.85 billion, including $29 million in debt.
But Casey's board slammed Couche-Tard's bid, calling it opportunistic and an attempt to take advantage of the economic downturn.
We believe the timing of your proposal is very opportunistic, given the impact of the recession and recent severe weather within our marketing territory, Casey's president and chief executive, Robert Myers, said in a letter.
The 14 percent premium of your proposal to our closing stock price yesterday, underscores that you are attempting to acquire U.S. companies on the cheap.
Couche-Tard, which has grown steadily through acquisitions over the years, has made no secret that it was on the prowl for more deals in the United States.
Casey's operates convenience stores and gas bars in the Midwest under the Casey's General Store, HandiMart and Just Diesel banners.
Couche-Tard operates 3,600 convenience stores in the United States under the Circle K banner and more than 5,400 under the Mac's name in Canada.
It threatened to take the bid to Casey's shareholders if its board refuses to co-operate.
If you continue to refuse to engage in meaningful negotiations, we are prepared to submit our proposal directly to your shareholders and commence a proxy contest to replace your board of directors, Alain Bouchard, Couche-Tard, president and chief executive, said in a letter to Casey's board.
Bill Chisholm, a retail analyst at MacDougall, MacDougall and MacTier in Toronto, sees a lengthy battle for the U.S. company.
If they could get it at $36, I think it would be a very good deal. Casey's is a very good business, he said.
I think it will be drawn out. I think Couche-Tard is determined and they will make their bid. If no other players come to the game, they might be successful.
However, Chisholm doubted that it would evolve into a bidding war, saying there were probably no other convenience store chains that would step up with a higher offer.
(Reporting by Scott Anderson; editing by Rob Wilson)