Casey’s stores says Canada’s Couche-Tard broke US security rules in takeover fight

Casey’s stores says Couche-Tard manipulated market

ANKENY, Iowa — Convenience store operator Casey’s General Stores Inc. has sued Alimentation Couche-Tard, saying the Canadian company violated U.S. securities laws by manipulating Casey’s stock price during a takeover effort.

Couche-Tard bid $1.9 billion for the company in April, which Casey’s dismissed as too low and not in its best interest. Couche-Tard, operator of the Circle K chain, then took its bid directly to shareholders in June in a tender offer. Casey’s urged its shareholders to reject the deal — which offers $36 per share.

Couche-Tard escalated the feud this month by announcing plans to nominate a slate of nine candidates to Casey’s board.

Casey’s complaint, filed in U.S District court in Iowa, alleges Couche-Tard bought nearly 2 million shares of Casey’s stock then announced its latest offer and sold the shares at a higher price on the same day.

Casey’s claims Couche-Tard manipulated the market by profiting from its own announcement and artificially depressing the run-up in stock price that typically follows the announcement of a takeover bid.

Couche-Tard said in a statement that the lawsuit is lacks merit and that it will defend itself against the 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,” the company statement said.

Couche-Tard said it believes its offer price is full and fair.

Casey’s, based in Iowa, operates about 1,500 convenience stores in the Midwest under the brands HandiMart, Just Diesel and Casey’s. Couche-Tard has nearly 6,000 stores in Canada and the U.S. under the Circle K and Couche-Tard banners.

Shares of Casey’s fell 30 cents to $35.41 in afternoon trading Friday.