Casey's CEO on Couche-Tard's "hostile" bid: “Couche-Tard is trying to acquire U.S. companies on the cheap.”

 

Couche-Tard says it's offering 7.4X EBITDA multiple, an average $1.3 million per store prices. Total cost: about $1.84 billion.

 

So what do you think? Who's the winner, should this deal happen with these numbers?

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Early Morgan Keegan/CSP Daily News poll results show almost 60% of respondents expect Couche-Tard to fail in its effort to acquire Casey's:

Do you think Couche-Tard will be successful in its attempt to purchase Casey's General Stores? (See stories above.)
Yes. 67 Votes 41.4%
No. 95 Votes 58.6%
Total Votes 162 Votes
I think I remember this same type of takeover bid many years ago. It left the 7-11 empire in tatters for many years afterwards. I was 8 years old and I remember the dinner conversation well. KKR was attempting a hostile takeover of the Southland Corporation. It led Southland and the Thompson brothers down a road that they never returned from (at least not in one piece) All the stores that Southland had in NC.SC and GA were lost in the fight as well as other damages. It may never be reveled to be a fact, but ultimately the McLane's purchase of the SDC were also a result of years of hardship. It was not until around 1995 or so that the cover of CSP had Clarke Matthews on it with the words; "will the Empire (7-11) strike back?"

So in short, if Casey's truly turns it down, then how far will Couche-Tard go? If they do what KKR did to 7-11 then I would say sell now, or we can wait 20 years or so for them (Casey's) to recover. Either way, it is not good.

I welcome any comments with regard to my historical representation of the facts.
Couche-Tard CFO on buying Casey's: "We have a game plan, and we'll just follow that to close this transaction." http://bit.ly/ajLO8B #cspnet
Well then, I guess it is going to be bye-bye to Casey's. I don't think that Casey's will hold them off. After looking into the price that Couche-Tard has paid in the past for purchases it is likely that they will counter between 40-45 per share and the board will approve it. The more interesting thing is what will be 7-11's response? There has always been an underlying mantra of "we are number one" in Dallas and beyond. It has existed for years, prior to DuPinto and Keyes, so who are they buying? Guarantee it will be big and guarantee it will be a shocker. Maybe those stores they lost oh so many years ago fall back into their hands in the exact same way they lost them. Currently trading at 15.24 might be next? You know this just may be the beginning of the major consolidation that has been predicted for a few years, I guess we will see. Off to buy some 15.13 (now) stock just in case. Either way this is big, and will have impact on our industry.
It is like I had a crystal ball, I guess we know what 7-11's response was........
The skuddle-butt at the opening reception of SOI provided some interesting commentary on this deal. Without exception, everyone I spoke to--retailers, consultants, financial experts--said they don't understand why Couche-Tard wants Casey's. Yes, there's the filling out of its geography, but beyond that, there is little symmetry (store size, distrobution, etc).

I think we have to rmember that Couch-Tard operates on a decentalized/reginal structure. They can take Casey's, carve off a few sites to existing regions, andcreate a whole new division with the core of teir stores, generally holding onto what has made Casey's successful and grow it through what Couche-Tard does elsewhere.

At any rate, here'sthe ltest on the bid and thoughts on just how much it might take to get a deal done: http://www.cspnet.com/ME2/Audiences/dirmod.asp?sid=&nm=&typ...
Looking back at Couche-Tards "take overs".... I'm not suprised to see this happening at this time!
Analysts suggest other possible buyers of Casey's could be 7-Eleven and Sun Capital Partners.
http://www.cspnet.com/ME2/Audiences/dirmod.asp?sid=&nm=&typ...

CSP Daily News Poll results:

Who do you think will buy Casey's General Stores?
Couche-Tard. 77 Votes 38.9%
7-Eleven. 20 Votes 10.1%
Sun Capital Partners. 6 Votes 3.0%
Other. 10 Votes 5.1%
None. 85 Votes 42.9%
Total Votes 198 Votes
If not Casey's, why not The Pantry ...

Pantry a Target?
After Casey's, Couche-Tard could hop on Kangaroo as next acquisition option, analyst says


CARY, N.C. -- The Pantry Inc., which owns more than 1,600 convenience stores in 11 states, could become an acquisition target for Couche-Tard, William Blair & Co. analyst Mark Miller wrote in a report to investors cited by The News & Observer. Shares of The Pantry rose yesterday after an analyst raised his rating on the Cary, N.C.-based chain, according to the newspaper ...

http://www.cspnet.com/ME2/Audiences/dirmod.asp?sid=&nm=&typ...

This seems a little more far-fetched to me than Casey's, primarily because Circle K already has a large presence in many of The Pantry's markets. But it certainly does seem like Couche-Tard wants to make a big score!
Absolutely pantry would make the radar, however what is CT cash position? Are they that "flush" that they can go down that road?
Was wondering when the other shoe would drop on this story. Today's the day!

Couche-Tard Commences Cash Tender Offer for Casey's
http://www.cspnet.com/ME2/dirmod.asp?sid=&nm=&type=Publishi...
No Plan B? Couche-Tard CEO on drive to buy Casey's: "We insist. ... We are committed to making this deal." http://bit.ly/9Q5OI7 #cspnet

When asked in April, "Do you think Couche-Tard will be successful in its attempt to purchase Casey's General Stores?", 41% of respondents to a CSP Daily News Poll answered yes. Asked a similar question yesterday, that response rate increased to 66%.

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