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The Wall Street Journal this morning reports that convenience store chain Casey’s General Stores has rejected the sweetened bid for the company by Canada’s Alimentation Couche-Tard of $1.9 billion, and has launched its own recapitalization bid to buy back as much as $500 million worth of stock at a per-share price higher than that offered by its suitor.

Couche-Tard’s offer is about $36.75 per share, while Casey’s offer is between $38 and $40.

According to Casey’s president/CEO Robert Myers, the move was initiated because the board thinks that “"our stock is meaningfully undervalued at recent trading levels and that the company is under-leveraged given Casey's strong balance sheet and consistent cash flow."

In a press release, Alain Bouchard, the Couche-Tard president/CEO, said he was disappointed with Casey’s rejection the company was disappointed with the rejection of the bid. "We will continue to evaluate our options," Bouchard said.

As noted by the Wall Street Journal, Couche-Tard, which is the largest Canadian convenience store owner, wants to expand its U.S. presence with the acquisition. It has more than 5,800 stores, including a presence in 43 U.S. states, with its Couche-Tard, Mac's and Circle K brands. Casey's has about 1,500 stores located in the Midwest, mainly in small communities.”
KC's View:
I don’t have an appreciation for Canadian subtext. I’m not sure whether “we will continue to evaluate our options” means that Couche-Tard is willing to accept rejection, or if it means, “this is war, and you ain’t seen nothing yet, eh.”