Alimentation calls Casey's $569 million note placement 'outrageous'

By Lisa Kerner

Charlotte, N.C., Aug. 12 - Alimentation Couche-Tard Inc. called Casey's General Stores, Inc.'s recently completed private placement of $569 million 5.22% senior unsecured notes due 2020 "outrageous."

Casey's, an Ankeny, Iowa-based convenience store operator, said it would use the proceeds to finance a modified Dutch auction tender offer for up to $500 million of Casey's common stock.

Also, Casey's said it will use approximately $59 million of the proceeds in connection with the prepayment of its senior notes with interest rates between 6.18% and 7.23% and its 7.38% senior notes. Any remaining proceeds will be used for general corporate purposes.

Alimentation, a Laval, Quebec-based convenience store operator, began a $36.75-per-share tender offer for all of the outstanding shares of Casey's common stock. The offer ends on Aug. 30, according to a company news release.

In a statement on Thursday, Alimentation said that Casey's private placement "has a costly and unusual 'poison put' feature in favor of the noteholders" and is designed to entrench the company's board and management at the expense of Casey's shareholders.

The terms of the notes require Casey's to pay the noteholders approximately $95 million in penalties if Casey's shareholders choose to replace a majority of the company's board, Alimentation said.

Alimentation believes the "leveraged recapitalization plan confirms there are no other buyers for Casey's at a price exceeding Couche-Tard's offer."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.