Monday, June 14, 2010

Cross-border spitting match

Alimentation Couche-Tard Inc., a company popularly known simply as Couche-Tard (from the French for "goes to bed late") is a Canadian convenience-store chain, with a headquarters in Laval, Quebec, and a listing on the Toronto Stock Exchange.

Couche-Tard seeks to acquire Casey's General Stores, an Iowa-based company in the same business. Casey's board refers to this as a “self-serving and transparent attempt by Couche-Tard to take significant value that rightly belongs to Casey’s shareholders.”

Or, as paraphrased by Andrew Willis of the Torontoi Globe & Mail: "Get lost.".

On Friday, Casey's announced that it has filed a lawsuit alleging a market manipulation scheme. From their release: "Couche-Tard had accumulated a stake of 1,975,362 Casey’s shares, which represented approximately 3.9% of the issued shares of Casey’s. Shortly after Couche-Tard made public its offer of $36.00 per share on April 9, it sold almost all of its shares at a price of $38.43 per share. The 1,975,000 shares sold by Couche-Tard on April 9 represented 17% of the total trading volume in Casey's stock during market hours on that day."

Couche-Tard replies: The lawsuit "is entirely without merit and we will vigorously defend against these baseless claims. We are disappointed that the Casey’s Board of Directors has chosen to proceed down this path, which we believe is designed to distract Casey's shareholders from focusing on the real issue – our all cash, premium bid for Casey’s."

My own biases are with Couche-Tard, as the recourse to the courts in such matters is generically an effort to protect an incumbent company from the verdict of the markets. But I am, as always, happy to hear my readers' views.

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