Casey's Fights Takeover Effort

JON SPRINGER

ANKENY, Iowa — Under pressure to create some value for a shareholder base considering an unsolicited takeover, Casey's General Stores last week reported quarterly profits exceeding expectations, plans to expand into Arkansas, and an 18% increase in its quarterly dividend.

The dividend of 10 cents per share would violate a condition of a hostile tender offer from Alimentation Couche-Tard, but would be only one of multiple disputes between Casey's and its Canadian suitor. Casey's, which has recommended its shareholders reject the $36-per-share offer, also this month filed suit against Couche-Tard, charging that the retailer illegally profited from its own buyout offer by unloading nearly 2 million shares in Casey's stock after announcing its intention to buy the company.

Couche-Tard in a statement said the suit, filed in U.S. District Court in Iowa June 11, was “entirely without merit.” Its tender offer — which Casey's maintains undervalues the company and its prospects for growth — expires on July 9.

Casey's last week reported net earnings of $116.9 million for the fiscal year that ended April 30, on sales of $4.6 billion, including gains in same-store sales for groceries and prepared foods. A new store format includes expanded cooler capacity and more prepared-food offerings, including made-to-order sandwiches. Around 120 stores have features of the new store format, and 80 of those have it format fully implemented.