NEW YORK, June 28 /PRNewswire/ -- ClearBridge Advisors, a US equity manager owned by Legg Mason, Inc., (NYSE: LM) today urged the Board of Directors of Casey's General Stores Inc. (Nasdaq: CASY) to negotiate in the best interests of shareholders with the management team of Alimentation Couche-Tard with respect to their offer to acquire the firm. The text of the letter from ClearBridge Advisors follows.
The Board of Directors
Casey's General Stores, Inc.
c/o Robert J. Meyers,
Casey's General Stores, Inc.
One S.E. Convenience Blvd
Ankeny, Iowa 50021
June 28, 2010
Dear Mr. Meyers,
ClearBridge Advisors has been a long-term shareholder of Casey's General Stores Inc. (Casey's) in a number of our Firm's equity strategies. We believe management has built a quality company, demonstrating superior financial metrics in the convenience store and general retail industry, with good long-term growth prospects.
Pursuant to our conversation with you and Bill Walljasper on June 23, 2010, we urge the management and the Board of Directors of Casey's to engage in a formal negotiation with the management team of Alimentation Couche-Tard (Couche-Tard) with respect to their $36 cash offer to acquire 100% of the outstanding shares of Casey's. Anything less gives the impression that independence, not the maximization of shareholder value, is the Board's highest priority.
The response by Casey's Board of Directors, made public in a 14D-9 filing dated June 7, 2010, makes a strong argument that Casey's stock is undervalued at $36 per share. We agree that the offer does not adequately capture the full earnings power and potential of Casey's when optimally capitalized. We also believe that the offer does not account for the revenue synergies and cost savings created through a combination of Casey's and Couche-Tard.
Since the unsolicited offer by Couche-Tard to acquire Casey's for $36 in cash, Casey's Board of Directors and management have not engaged in meaningful discussion with Couche-Tard, despite Couche-Tard's repeated stated availability to discuss the terms and structure of the proposed transaction. That willingness to negotiate was reaffirmed to us by the senior management of Couche-Tard during their visit to ClearBridge's offices on June 4, 2010.
However, it is the fiduciary duty of Casey's management and the Board to negotiate in good faith and act in the best interest of Casey's shareholders. Discussion of the offer or other options does not restrict or preclude the Board's ability to reject Couche-Tard's offer, or any subsequent alternative, that may result from negotiation, in our view. Conversely, the Board's intransigence discourages a higher offer and could result in shareholder wealth destruction should the Couche-Tard tender offer be withdrawn or not accepted by shareholders.
We urge the Board of Directors to reconsider its position with regard to the Couche-Tard tender and negotiate in good faith for the benefit of all shareholders.
About ClearBridge Advisors
ClearBridge Advisors is Legg Mason's largest equity manager with approximately $54.9 billion in assets under management, as of March 31, 2010. Led by the insight of proprietary, fundamental research and a team of portfolio managers with an average of 23 years of investment industry experience, their investment process provides clients with a diverse menu of equity-focused strategies in a number of investment vehicles and personalized, value-added client service.
SOURCE ClearBridge Advisors