UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ¨ Filed by a Party other than the Registrant x
Check the appropriate box:
| ¨ | Preliminary Proxy Statement |
| ¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ¨ | Definitive Proxy Statement |
| x | Definitive Additional Materials |
| ¨ | Soliciting Material Pursuant to §240.14a-12 |
CASEY’S GENERAL STORES, INC.
(Name of Registrant as Specified in its Charter)
ACT ACQUISITION SUB, INC.
ALIMENTATION COUCHE-TARD INC.
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| x | No fee required. |
| ¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| (1) | Title of each class of securities to which transaction applies: |
| (2) | Aggregate number of securities to which transaction applies: |
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| (4) | Proposed maximum aggregate value of transaction: |
| (5) | Total fee paid: |
| ¨ | Fee paid previously with preliminary materials. |
| ¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| (1) | Amount Previously Paid: |
| (2) | Form, Schedule or Registration Statement No.: |
| (3) | Filing Party: |
| (4) | Date Filed: |
The following are presentation materials of Alimentation Couche-Tard Inc.:
 Alimentation Couche-Tard
Offer to Acquire Casey’s General Stores
September 2010 |
 1
Important Information
This communication does not constitute an offer to buy or solicitation of an offer to sell any
securities. A tender offer (the “Tender Offer”) to purchase (1) all issued and outstanding shares of
common stock, no par value, of Casey’s General Stores, Inc. (“Casey’s”), and (2)
the associated rights to purchase shares of Series A Serial Preferred Stock, no par value, of Casey’s issued
pursuant to the Rights Agreement, dated as of April 16, 2010, between Casey’s and Computershare
Trust Company, N.A., as Rights Agent, at a price of $38.50 per share, net to the seller in cash,
without interest and subject to any required withholding of taxes, is being made pursuant to a tender
offer statement on Schedule TO (including the Offer to Purchase, Letter of Transmittal and other
related tender offer materials, together with any amendments and supplements thereto) that was filed
by Alimentation Couche-Tard Inc. (“Couche-Tard”) and ACT Acquisition Sub, Inc. (“ACT
Acquisition Sub”) with the Securities and Exchange Commission (“SEC”) on June 2, 2010.
These materials, as they may be amended from time to time, contain important information, including the
terms and conditions of the Tender Offer, that should be read carefully before any decision is made
with respect to the Tender Offer. Investors and security holders of Casey’s can obtain free
copies of these documents and other documents filed with the SEC by Couche-Tard through the web
site maintained by the SEC at http://www.sec.gov or by directing a request to the Corporate
Secretary of Alimentation Couche-Tard Inc., 4204 Industriel Blvd., Laval, Québec, Canada H7L
0E3. Free copies of any such documents can also be obtained by directing a request to Couche-
Tard’s information agent, Innisfree M&A Incorporated, at (877) 717-3930.
Couche-Tard and ACT Acquisition Sub filed a definitive proxy statement on Schedule 14A with the
SEC on August 19, 2010 in connection with the solicitation of proxies for the 2010 annual meeting
of shareholders of Casey’s. The definitive proxy statement was mailed to the shareholders of
Casey’s on or about August 19, 2010. Investors and security holders of Casey’s are urged to read the
definitive proxy statement and other documents filed with the SEC carefully in their entirety as they
become available because they will contain important information. Investors and security holders
of Casey’s can obtain free copies of these documents and other documents filed with the SEC by
Couche-Tard through the web site maintained by the SEC at http://www.sec.gov or by directing a
request to the Corporate Secretary of Alimentation Couche-Tard Inc., 4204 Industriel Blvd., Laval,
Québec, Canada H7L 0E3. Free copies of any such documents can also be obtained by directing
a request to Couche-Tard’s information agent, Innisfree M&A Incorporated, at (877)
717-3930. Free copies of the definitive proxy statement and any additional proxy solicitation materials of
Couche-Tard and ACT Acquisition Sub can also be obtained through the web site maintained at
http://www.ReadOurMaterials.com/Couche-Tard. Certain Information Regarding Participants
Couche-Tard and ACT Acquisition Sub, its indirect wholly owned subsidiary, and certain of
their respective directors and executive officers, and Couche-Tard’s nominees for election to the board of
directors of Casey’s at the 2010 annual meeting of shareholders of Casey’s, may be deemed to
be participants in the proposed transaction under the rules of the SEC. As of the date of this
presentation, Couche-Tard is the beneficial owner of 362 shares of common stock of Casey’s
(which includes 100 shares of common stock of Casey’s owned by ACT Acquisition Sub). Security
holders may obtain information regarding the names, affiliations and interests of
Couche-Tard’s directors and executive officers in Couche-Tard’s Annual Report on Form 40-F for the fiscal year
ended April 25, 2010, which was filed with the SEC on July 19, 2010, and its proxy circular for the
2010 annual general meeting, which was furnished to the SEC on a Form 6-K on July 19, 2010.
These documents can be obtained free of charge from the sources indicated above. Additional
information regarding the interests of these participants in the proxy solicitation and a description of
their direct and indirect interests, by security holdings or otherwise, is included in the definitive
proxy statement filed with the SEC on August 19, 2010. Forward-looking Statements
The statements set forth in this communication, which describes Couche-Tard’s objectives,
projections, estimates, expectations or forecasts, may constitute forward-looking statements. Positive or
negative verbs such as “plan”, “evaluate”, “estimate”,
“believe” and other related expressions are used to identify such statements. Couche-Tard would like to point out that, by their very nature,
forward-looking statements involve risks and uncertainties such that its results, or the measures
it adopts, could differ materially from those indicated or underlying these statements, or could have
an impact on the degree of realization of a particular projection. Major factors that may lead to a
material difference between Couche-Tard’s actual results and the projections or expectations set
forth in the forward-looking statements include the possibility that Couche-Tard will not be
able to complete the tender offer as expected; Couche-Tard’s ability to achieve the synergies and value
creation contemplated by the proposed transaction; Couche-Tard’s ability to promptly and
effectively integrate the businesses of Casey’s; expected trends and projections with respect to particular
products, services, reportable segment and income and expense line items; the adequacy of
Couche-Tard’s liquidity and capital resources and expectations regarding Couche-Tard’s financial
condition and liquidity as well as future cash flows and earnings; anticipated capital expenditures;
the successful execution of growth strategies and the anticipated growth and expansion of
Couche-Tard’s business; Couche-Tard’s intent, beliefs or current expectations,
primarily with respect to future operating performance; expectations regarding sales growth, gross margins, capital
expenditures and effective tax rates; expectations regarding the outcome of various pending legal
proceedings; seasonality and natural disasters; and such other risks as described in detail from
time to time in the reports filed by Couche-Tard with securities authorities in Canada and the
United States. Unless otherwise required by applicable securities laws, Couche-Tard disclaims any
intention or obligation to update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. The forward-looking information in this communication
is based on information available as of the date of the communication.
|
 2
Table of contents
1.
Overview of Couche-Tard’s offer
2.
Couche-Tard is offering compelling value for Casey’s
3.
Casey’s Board must be replaced
4.
Responses to Casey’s misinformation campaign
Appendix |
 3
1.
Overview of Couche-Tard’s offer |
 4
Alimentation Couche-Tard means “late night snack”
•
Largest independent convenience store operator in North
America by company-operated stores
•
#1 Canadian convenience store operator
•
Enterprise value of $4.8 billion and market cap of $4.3 billion as of
September 1, 2010
•
Alain Bouchard, President and CEO, started the chain in 1980
with a single store
•
Strong network of 5,869 convenience stores in U.S. and Canada
•
Highly decentralized operations with fewer than 20 people at
corporate headquarters
•
Management owns approximately 22% of the company
•
Longstanding history of successful acquisitions
•
Bought Circle K from ConocoPhillips
•
Great opportunity for suppliers and employees of acquired
companies –
COO Brian Hannasch of Iowa was formerly at
Bigfoot Food Stores
Total stores
FY2010 Sales
US
78%
Canada
22%
5,869 stores
$16.4 billion
US
65%
Canada
35% |
 5
Couche-Tard is committed to acquiring Casey’s
Compelling offer
for Casey’s
shareholders
•
Compelling offer: $38.50 cash per Casey’s share
•
53% of Casey’s shareholders tendered at $38.00 per share in Casey’s
self-tender •
17% premium to all-time and 52-week high prior to our announcement on
April 8, 2010 •
Since we approached Casey’s in October 2009, Casey’s has not presented
any alternative that provides value greater than Couche-Tard's offer
•
No other firm offer
to buy Casey’s has appeared
•
High multiple relative to precedent transactions
Couche-Tard has
nominated eight
independent
nominees
•
Committed to acting in the best interests of Casey’s shareholders
•
Highly qualified nominees will bring independent oversight accountability
•
No historical entrenchment
Casey’s Board
and management
do not represent
Casey’s
shareholders’
best interests
•
Refuses to meet or negotiate with Couche-Tard
•
Forced Couche-Tard to go public with its offer
•
Implemented
a
shareholder
rights
plan
(“Poison
Pill”)
to
prevent
Couche-Tard
from
closing on its offer
•
Financed
stock
buy-back
with
highly
unusual
financing
containing
a
poison
put
mechanism
–
Transfers ~$100MM ($2.65 / share) to noteholders
–
Coerces shareholders not to exercise their right to sell Casey’s or replace
Casey’s Board
•
Enhanced management golden parachutes |
 6
Couche-Tard is committed to acquiring Casey’s
(cont’d)
Couche-Tard has
listened to
Casey’s
shareholders
•
Raised its offer above the price at which a majority of Casey’s shareholders
were willing to sell their shares
•
Secured acquisition financing
Couche-Tard is
committed to a
transaction
•
Full support of Couche-Tard’s Board and majority ownership group
•
Management visited over 300 Casey’s stores
•
Secured financing from major financial institutions
•
Engaged Credit Suisse, Dewey & LeBoeuf, Innisfree, Joele
Frank and Nyemaster
Goode, among other advisors |
 7
Couche-Tard has secured financing and has
ample liquidity to fund the all-cash transaction
Couche-Tard has secured favorable financing with attractive terms sufficient to
fund the entire cash consideration
•
Up to $1.5 billion 4-year unsecured term loan facility, which complements
existing, unused revolver capacity of $760 million
•
Consortium of Canadian and international financial institutions led by:
-
The Bank of Nova Scotia
-
HSBC Bank Canada
-
Caisse
de dépôt
et placement du Québec
-
Rabobank
Nederland, Canadian Branch
•
With the new $1.5 billion term loan facility, existing cash and borrowing capacity
under its
existing
credit
facility,
Couche-Tard
has
ample
liquidity
to
fund
the
all-cash
transaction
($ in millions)
Unused revolver capacity
$760
Term loan facility
1,500
Cash on hand as of 6/20/2010
221
Total liquidity
$2,481 |
 8
Chronology
•
October
6,
2009
–
Alain
Bouchard
contacted
Robert
Myers
about
a
possible
business
combination
only
to
be
turned down without a discussion
•
November 13, 2009 –
Mr. Bouchard contacted Mr. Myers again to reiterate Couche-Tard’s
interest and was asked to submit any proposal in writing
•
March 9, 2010 –
Mr. Bouchard sent a letter to Mr. Myers setting forth a proposal to acquire 100%
of the outstanding
shares
of
Casey’s
at
a
price
of
$36.00
per
share
which
was
rejected
without
a
discussion
•
March 30, 2010 –
Mr. Bouchard sent a letter to Mr. Myers requesting that Casey’s Board
reconsider the proposal and
enter
into
negotiations,
which
was
again
turned
down
without
a
discussion
•
April 9, 2010 –
Couche-Tard publicly disclosed its offer of $36.00 per Casey’s
share •
April 9 2010 –
Couche-Tard sold its position in Casey's in a series of open market sales at a
weighted average price
of
$38.43
per
share,
consistent
with
its
then
current
view
that
Casey’s
value
was
$36.00
per
share
•
April 16, 2010 –
Casey’s installed a Poison Pill
to entrench Casey’s Board and management and enhanced its
golden parachutes
•
June
2, 2010 –
Couche-Tard commenced
a tender offer for Casey’s
at
$36.00 per share
•
June
7, 2010 –
Couche-Tard nominated a slate of independent directors to Casey's Board
•
July 22, 2010 –
Couche-Tard increased its offer to $36.75 per Casey’s share
•
July 28, 2010 –
Casey’s announced a recapitalization plan to purchase up to approximately 25%
of Casey’s common stock at a price of $38 to $40 per share
•
August
10,
2010
–
To
finance
its
leveraged
recapitalization,
Casey’s
announced
an
off-market
debt
financing
with a “poison put”
mechanism designed to impede any takeover attempt and coerce shareholders not to
vote against Casey’s incumbent Board
•
August
26,
2010
–
Casey’s
announced
the
results
of
its
self-tender;
26.8
million
shares
(a
majority
of
the
then
outstanding shares of Casey’s) were tendered at the minimum purchase price of
$38.00 per share •
September 1, 2010 –
Couche-Tard increased its offer for Casey’s to $38.50 per share and
announced that it has secured financing
•
September 23, 2010 –
Casey’s annual meeting of shareholders |
 9
2.
Couche-Tard is offering compelling value for
Casey’s |
 10
Casey’s shareholders have spoken on value
•
Casey’s tender offer for up to approximately 25% of its own stock at $38.00
to $40.00 per share expired on August 25, 2010
–
26.8 million shares –
~53% of the then outstanding shares of Casey’s were
tendered at the minimum purchase price of $38.00 per share
–
Strong indication of value –
actual holders’
sale price
•
Now, Couche-Tard is offering $38.50 to Casey’s shareholders
–
Couche-Tard's increased all-cash offer of $38.50 per share of Casey's is
$0.50 per share higher than Casey’s self-tender
•
Why won’t Casey’s Board let its shareholders accept our offer? A majority
of Casey’s shareholders were sellers at this price
•
Couche-Tard has been listening to Casey’s shareholders, and now it is time
for Casey’s Board to do the same
The results of Casey’s self-tender demonstrates that our $38.50
all-cash offer to acquire 100% of Casey’s is compelling
|
 11
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
$0.00
$12.83
$25.67
$38.50
Casey’s stock price performance since IPO
Couche-Tard’s cash offer of $38.50 per share
Source:
FactSet
Research Systems.
Casey’s 52-week and all-time high price of $32.83 per share
+17% premium
Prior to Couche-Tard’s offer, Casey’s shares have never traded above $32.83 per share
|
 12
Casey’s is fully valued by Couche-Tard’s offer
•
Prior to Couche-Tard’s offer, Casey’s was covered by eight analysts,
who had a mean target price of $33.74 per share
–
Casey’s is a well-run business, whose value was recognized by the market
prior to our initial offer –
The market understood Casey’s value and prospects and anticipated a good
first quarter •
Our premium all-cash offer recognizes Casey’s full value
–
7.5x EV / LTM EBITDA is above the average multiple of 6.3x for precedent
C-store transactions –
$1.3 million EV per store is above the average multiple of $662 thousand for
precedent C-store transactions
–
32% premium over the one-year average closing share price of $29.14 (prior to
April 8, 2010) –
26% premium over the 90-calendar day average closing share price of $30.68
(prior to April 8, 2010)
–
22%
premium
over
the
unaffected
closing
share
price
of
$31.59
on
April
8,
2010
–
17%
premium
to
the
all-time
and
52-week
high
trading
price
of
$32.83
(prior
to
April
8,
2010)
•
Volatile gasoline margins are currently at their peak
–
Couche-Tard is paying a high multiple on peak gasoline earnings, despite
gasoline margin volatility •
Our offer fully values Casey’s owned real estate
–
Minimal intrinsic real estate value (small, rural and limited alternative uses and
very little available for sale-leaseback)
•
Few synergies with Couche-Tard
–
Limited operations overlap
–
Casey’s is not a turn-around story; currently a well operated
business |
 13
Couche-Tard is paying a high multiple on peak
gasoline earnings, despite gasoline margin volatility
•
Gasoline retail sales constitute 68.5% of Casey’s FY2010 sales and 22.5% of
Casey’s FY2010 gross profit
•
Recent
industry
retail
gasoline
margins
are
unsustainably
high
and
have
benefited
from:
–
A slow and steady decline in underlying crude prices from their peak of $145 in
July 2008 to $72 currently
–
Retail prices are sticky and do not decline immediately even when crude prices
decline. Accordingly, recent retail margins have been inflated
–
Hurricane activity in the Gulf during recent years has led to actual supply
disruptions, which resulted in spikes in retail margins
•
Demand for finished motor gasoline has declined over the past five years
–
Across the U.S., 275.5 million monthly barrels were supplied as of June 2010,
compared to 281.2 million monthly barrels during the prior five years
–
This
trend
is
more
pronounced
in
the
Midwest,
where
78.8
million
monthly
barrels
were
supplied
as
of June 2010, compared to 82.9 million monthly barrels during the prior five years
11.31¢
9.32¢
11.00¢
10.20¢
10.78¢
11.47¢
10.40¢
13.90¢
12.87¢
13.90¢
FY2001
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
Source :
Casey's public filings.
Casey’s gasoline margin per gallon |
 14
7.5x
5.1x
7.9x
5.1x
5.5x
8.6x
5.4x
5.8x
6.1x
6.6x
Susser /
Town &
Country
Wellspring
Capital /
Susser
Green Valley
Acquisition /
Uni-Mart
Couche-Tard /
Circle K
The Pantry /
Golden Gallon
(Ahold)
Sunoco /
Speedway
SuperAmerica
Uni-mart /
Orloski Services
Station
Tosco /
Exxon
Apollo /
Clark
USA
Tosco /
Circle K
Enterprise Value / LTM EBITDA
Implied transaction multiple: 7.5x
Average
6.3x
Source:
Public filings, press releases and research reports.
Announce date:
09/07/07
12/25/05
07/04/04
10/03/03
08/03/03
02/03/03
04/21/00
12/01/99
05/01/99
02/01/96
EV ($MM)
$361
$277
$90
$830
$187
$140
$41
$860
$230
$921
LTM EBITDA
$49
$54
$11
$163
$31
$25
$5
$160
$35
$159
($MM)
Couche-Tard’s offer is at a premium multiple to
precedent C-store transactions
Excluded transaction
•
Excludes
squeeze-out
of
7-Eleven
by
its
Japanese
parent
IYG
Holding
in 2005
–
Not comparable as the purchase price included very valuable 7-Eleven
licenses –
7-Eleven has a different model due to its high number of franchised
stores |
 15
$868
$315
$499
$1,355
$725
$494
$342
$400
$958
Wellspring
Capital / Susser
Green Valley
Acquisition / Uni-
Mart
Couche-Tard /
Circle K
The Pantry /
Golden Gallon
(Ahold)
Sunoco /
Speedway
SuperAmerica
Uni-mart /
Orloski Services
Station
Tosco / Exxon
Mobil
Apollo /
Clark USA
Tosco /
Circle K
Implied Couche-Tard transaction multiple:
$1.3 million per store
Average: $662
Source:
Public
filings,
press
releases
and
research
reports.
Note:
Store count includes all stores regardless of owned vs. leased and operated vs.
dealer. Enterprise Value
/ Store
($ thousands)
Announce date
12/25/05
07/04/04
10/03/03
08/03/03
02/03/03
04/21/00
12/01/99
05/01/99
02/01/96
EV ($MM)
$277
$90
$830
$187
$140
$41
$860
$230
$921
No. of Stores
319
285
1,663
138
193
43
1,740
672
2,300
Couche-Tard’s offer is at a premium multiple to
precedent C-store transactions (cont’d)
•
Excludes purchase price multiple of the squeeze-out of 7-Eleven by its
Japanese parent IYG Holding in 2005 –
Not comparable as the purchase price included very valuable 7-Eleven licenses,
plus 7-Eleven has a different model due to its
high number of franchised stores
•
Susser / Town & Country EV/store multiple excluded from average as Town &
Country stores generated significantly higher volume and profitability and
therefore are not comparable to Casey's Excluded transaction
|
 16
Couche-Tard’s offer is at a premium to other all-
cash unsolicited offers since 1997
Premium of final offer to 52-week high
Premium of final offer to all-time high
Some unsolicited offers are opportunistic, Couche-Tard’s offer is not
(69%)
(41%)
(25%)
(21%)
(18%)
(16%)
(14%)
(10%)
(8%)
(6%)
(5%)
(5%)
(5%)
(4%)
(3%)
(3%)
(2%)
(2%)
(1%)
1%
1%
2%
2%
2%
4%
5%
5%
5%
6%
6%
8%
9%
11%
13%
14%
17%
17%
18%
19%
20%
22%
39%
Blockbuster / Circuit City Stores*
Vishay / International Rectifier*
Pharma
Services / Quintiles Transnational
AlliedSignal / AMP*
Koninklijke
Philips Electronic / VLSI Technology
Chesapeake / Shorewood Packaging*
NiSource / Columbia Energy Group
Nationwide Mutual Insurance / Allied Group
VA Partners / Acxiom*
Jerry Moyes
/ Swift Transportation
Highfields
Capital Mgmt / Circuit City Stores*
Cenveo
/ Banta*
Bristol-Myers Squibb / Imclone
Systems*
ArvinMeritor / Dana*
Investment Group / Aramark
Cadence Design Systems / Mentor Graphics*
Shell Oil / Barrett Resources*
BASF / Engelhard
Constellation Brands / Robert Mondavi
Astellas
Pharma
/ OSI Pharmaceuticals
Air Products and Chemicals / Airgas
Footlocker / Genesco*
Oracle / Bea*
Montana Public Power / NorthWestern*
Shorewood Packaging / Chesapeake*
King Pharmaceuticals / Alpharma
Electronic Arts / Take-Two Interactive Software*
Pilgrim's Pride / Gold Kist
Simon Property Group / Taubman
Centers*
International Specialty Prods / Dexter*
Investor Group / Harrah's Entertainment
Omnicare / NeighborCare
Investor Group / Taubman
Centers*
Weyerhaeuser / Willamette Industries
Elliott Associates / Novell*
Computer Assoc Intl / Computer Sciences*
Couche-Tard / Casey's
Oracle / PeopleSoft
Inbev
/ Anueuser-Busch
Astellas
Pharma
/ CV Therapeutics*
Unilever / Bestfoods
Roche Holding / Ventana
Medical Systems
(94%)
(92%)
(88%)
(84%)
(83%)
(79%)
(73%)
(71%)
(67%)
(66%)
(64%)
(64%)
(49%)
(47%)
(46%)
(45%)
(42%)
(42%)
(38%)
(38%)
(35%)
(32%)
(24%)
(16%)
(15%)
(12%)
(10%)
(7%)
(5%)
(3%)
(3%)
(2%)
(1%)
2%
2%
3%
6%
6%
8%
9%
11%
17%
Blockbuster / Circuit City*
Elliot Associates / Novell*
Oracle / Bea*
Highfields
Capital Mgmt / Circuit City Stores*
Pharma
Services / Quintiles Transnational
Astellas
Pharma
/ CV Therapeutics*
Oracle / PeopleSoft
ArvinMeritor / Dana*
Vishay / International Rectifier*
AlliedSignal / AMP*
Cadence Design Systems / Mentor Graphics*
Bristol-Myers Squibb / Imclone
Systems*
King Pharmaceuticals / Alpharma
Shorewood Packaging / Chesapeake*
Koninklijke
Philips Electronic / VLSI Technology
VA Partners / Acxiom*
Chesapeake / Shorewood Packaging*
Astellas
Pharma
/ OSI Pharmaceuticals
Unilever / Bestfoods
Electronic Arts / Take-Two Interactive Software*
Weyerhaeuser / Willamette Industries
Jerry Moyes
/ Swift Transportation
Inbev
/ Anheuser-Busch Companies
BASF / Engelhard
NiSource / Columbia Energy Group
Pilgrim's Pride / Gold Kist
Nationwide Mutual Insurance / Allied Group
International Specialty Prods / Dexter*
Cenveo
/ Banta*
Investment Group / Aramark
Air Products and Chemicals / Airgas
Shell Oil / Barrett Resources*
Constellation Brands / Robert Mondavi
Foot Locker / Genesco*
Montana Public Power / NorthWestern*
Roche Holding / Ventana
Medical Systems
Computer Assoc Intl / Computer Sciences*
Simon Property Group / Taubman
Centers*
Investor Group / Harrah's Entertainment
Omnicare / NeighborCare
Investor Group / Taubman
Centers*
Couche-Tard / Casey's
Mean: (32.7%)
Mean: (0.4%)
Source:
Securities Data Corporation.
Note:
Includes all-cash unsolicited offers over $1 billion since 1997.
* Denotes withdrawn transactions. |
 17
Casey’s stock price would have declined if not for
Couche-Tard’s offer
Since Couche-Tard's public announcement on April 8th…
•
The
hoped
for
“summer
of
recovery”
didn’t
materialize
and
fear
that
the
economy
is heading into a severe double dip recession has increased
•
Major market indices have declined
–
S&P
500
has
declined
9%
and
the
DJIA
is
down
6%
–
Approximately
77%
of
company
stock
prices
listed
on
the
NYSE
are
down
•
The economy is slowing; second-quarter GDP growth was revised downward to
1.6% from 2.4%, compared to 3.7% in the first quarter
•
Concern
that
European
debt
crisis
will
adversely
affect
the
U.S.
economy
•
High unemployment rate continues
–
9.6% in August 2010
•
Consumer
spending
remains
weak
as
consumers
remain
nervous
about
jobs
and
the state of the economy |
 18
Casey’s is correlated to the S&P 500 Retail Index
•
Casey’s doesn’t correlate perfectly to any index
•
The S&P Retail Index
(1)
is a capitalization-weighted index of 29 domestic equities in
the retail sector, traded on the New York Stock Exchange, American Stock Exchange
and NASDAQ
•
Casey’s stock trading is more correlated to the S&P Retail Index than it
is to any other C-store company
Source:
FactSet
Research
Systems.
Note:
Correlation for periods ending April 8, 2010.
(1)
Includes AZO, BBBY, BBY, BIG, COST, CVS, DDS, DG, FDO, GPS, HD, JCP, JWN, KR, KSS,
LOW, LTD, ODP, RSH, S, SHW, SPLS, SWY, TGT, TIF, TJX, WAG, WINN and
WMT. See Appendix for details. Statistical correlation (R
2
10 year
5 year
3 year
2 year
1 year
S&P Retail Index
18.4%
26.7%
31.1%
31.3%
28.5%
S&P 500
25.6%
30.6%
35.4%
34.4%
30.2%
Couche-Tard
1.1%
1.8%
2.3%
1.9%
2.2%
Pantry
7.8%
18.1%
21.2%
24.0%
17.9%
Susser
NA
NA
15.3%
18.3%
10.7%
) with Casey's |
 19
Casey’s is correlated to the S&P 500 Retail Index
(cont’d)
Note:
As of September 1, 2010.
(1)
Includes AZO, BBBY, BBY, BIG, COST, CVS, DDS, DG, FDO, GPS, HD, JCP, JWN, KR, KSS,
LOW, LTD, ODP, RSH, S, SHW, SPLS, SWY, TGT, TIF, TJX, WAG, WINN and WMT. See
Appendix for details. April 8,
2010
September 1,
2010
466
412
$31.59
$27.89
Casey's Share
Price on April 8,
2010
Implied Casey's Share
Price based on the S&P
500 Retail Index
$38.50
Couche-Tard's
all-cash offer
S&P
Retail Index
(1)
Casey’s Implied Share Price |
 20
Casey’s share price would have decreased based
on major market indices
Source:
Factset
Research Systems.
(1)
Implied Casey’s share price based on relative change in price vs.
pre-announcement price of $31.59. •
Recent C-store sector stock market performance has been affected by
Couche-Tard’s offer –
Not a good indication of Casey’s unaffected stock price
–
C-store peers are trading at a premium due to takeover rumors spurred by
Couche-Tard’s offer –
Casey’s
stock
trading
is
more
correlated
to
the
S&P
Retail
Index
than
it
is
to
any
other
C-store
company
•
Absent Couche-Tard’s offer, Casey’s stock would have traded down
with other market indices “The stock [The Pantry] has potential upside,
partly because it could be an attractive target for an acquirer in an
industry that is likely to see lots of deals over the coming
years” Barron’s
21 June, 2010
“It's one of the retail sectors that hasn't consolidated, relative
to others that we cover”
William Blair & Co.
21 June, 2010
“With the recent interest in Casey's General Stores, shares in The
Pantry may be the next best thing.”
Investopedia
22 June, 2010
“It's one of the retail sectors that hasn't consolidated, relative
to others that we cover”
William Blair & Co.
21 June, 2010
“We acknowledge Casey’s stock will likely drop once the
tender offer is complete and if the Couche-Tard offer is
withdrawn”
BMO Capital Markets
20 August, 2010
$38.50 offer
Implied Casey's
as a% premium
Index
4/8/10
9/1/10
% change
share price
(1)
to implied price
S&P 500
1,186
1,080
(8.9%)
28.76
33.8%
S&P Retail Index
466
412
(11.7%)
27.89
38.1%
S&P Small Cap 600
371
334
(9.8%)
28.50
35.1%
Dow Jones Industrial Average
10,927
10,269
(6.0%)
29.69
29.7%
Russell 3000
3,101
2,839
(8.5%)
28.92
33.1%
NYSE Composite
7,565
6,911
(8.6%)
28.86
33.4% |
 21
Casey’s equity research price targets
•
Couche-Tard’s all cash offer is a 26% premium to the average present
value of Casey’s equity research analyst price targets prior to making
our offer public •
Subsequent to Couche-Tard’s offer, Casey’s equity research price
targets increased •
Couche-Tard’s
all
cash
offer
of
$38.50
is
above
the
average
present
value
of
Casey’s
equity
research analyst price targets of $37.43
•
The revised target prices are based on assumptions that are inconsistent with
observable data and widespread market views of the C-store
industry •
Constant P/E multiple post Casey’s leveraged recapitalization
•
Unusually high and unsustainable gasoline margins going forward
•
Equity research also cite many factors that may affect their target price
including: •
Gasoline margin volatility
•
Month-to-month volatility in merchandise comp sales
•
Lack of specific guidance on EPS
Source: Bloomberg.
(1) Price targets discounted back from 18
months after report day to 9/1/10 at a discount rate of 10%. Prior to 4/8/2010
After 4/8/2010
Present
$38.50 offer as
Present
$38.50 offer as
value
a % premium /
value
a % premium /
Report
Target
of target
(discount) to
Report
Target
of target
(discount) to
Firm
date
price
price
(1)
implied price
date
price
price
(1)
implied price
BMO Capital Markets
4/6/2010
$30.00
$27.02
42.5%
8/23/2010
$39.00
$33.87
13.7%
BAML
3/18/2010
33.00
29.87
28.9%
6/15/2010
39.00
34.50
11.6%
Feltl
& Company
3/12/2010
29.70
26.92
43.0%
7/28/2010
46.00
40.22
(4.3%)
Sidoti
& Company
3/12/2010
40.00
36.26
6.2%
8/31/2010
50.00
43.36
(11.2%)
RBC
3/10/2010
36.00
32.65
17.9%
8/17/2010
44.00
38.27
0.6%
Northcoast
Research
NA
NA
NA
NA
7/13/2010
42.00
36.87
4.4%
Morgan Keegan
NA
NA
NA
NA
8/17/2010
44.00
38.27
0.6%
Miller Tabak
NA
NA
NA
NA
7/30/2010
39.00
34.08
13.0%
Average
$33.74
$30.54
26.0%
$42.44
$37.43
2.9%
Median
33.00
29.87
28.9%
42.00
37.57
2.5% |
 22
Casey’s leveraged recapitalization does not
increase value for its shareholders
•
Empirical evidence and academic studies contradict the fallacy that EPS
accretion from stock buy backs leads to increased stock prices
Rappaport. Ten Ways to Create Shareholder Value. 2006. Harvard Business
Review Oded
& Michel. Stock Repurchase and the EPS Enhancement Fallacy. 2008. Financial
Analyst Journal |
 23
Source:
Bloomberg.
Note:
All P/E ratios are based on forward looking earnings estimates.
Across the market, in the C-store industry and for Casey’s, P/E ratios have
fluctuated significantly over time, showing that P/E ratios are
volatile P/E ratios are volatile
5
10
15
20
5
10
15
20
2006
2007
2008
2009
2010
2006
2007
2008
2009
2010
5
10
15
20
2006
2007
2008
2009
2010
Historical P/E ratios
Average:
13.4 Standard deviation: 1.4
Average:
15.9 Standard deviation: 2.1
Average:
15.1 Standard deviation: 1.6 |
 24
In almost half of the cases, the P/E ratios of companies that have announced a share
repurchase have decreased in the year following the announcement
In almost half of all share repurchases
announced, P/E ratios have decreased
Performance of P/E ratios of companies that have announced a share repurchase,
adjusted for market movements over the year following the announcement
25
50
75
100
125
150
175
0%
25%
50%
75%
100%
75
percentile
25
h
percentile
Median
Announcement
Announcement
+365 days
+365 days
Source: Bloomberg.
Note: Based on all share repurchase announcements. P/E ratios calculated as
share price divided by forward looking EPS. Share price appreciation calculated as excess returns to the
S&P 500 on a beta
adjusted basis. |
 25
Over the last three and five years, EPS growth has been a very limited driver of
total share price returns, explaining between 0% and 2% of all S&P 1500
company returns Source:
Bloomberg.
Note:
Sample
includes
non-financial
S&P
1500
firms.
Total
returns
calculated
as
share
price
appreciation
over
the
last
three
and
five
years
with
dividends
reinvested
respectively.
Very weak relationship between EPS growth and TSR
EPS profile is only one factor in TSR
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
-300%
-150%
0%
150%
300%
EPS growth
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
-300%
-150%
0%
150%
300%
EPS growth
What about over the last 5 years?
How much has EPS growth explained total returns over the last 3 years?
|
 26
3.
Casey’s Board must be replaced |
 27
Casey’s Board seems to be more interested in
preserving their jobs than serving shareholders’
best interests
Refuse to engage
in dialogue
Entrenched
Board and
management
Leveraged
recapitalization
•
Casey’s has rejected
all of Couche-Tard’s offers
•
Casey’s continues to refuse to meet or negotiate with Couche-Tard
•
Casey’s executives have been granted lucrative golden parachutes
•
Adopted
a
Poison
Pill
and
commenced
costly
and
meritless
litigation
against Couche-Tard (they have dropped most claims)
•
Installed
coercive
financing
with
a
very
costly
“poison
put”
mechanism
designed to impede any takeover attempt by any party
•
Casey’s
Board
and
management
only
own
0.3%
of
Casey’s
–
their
financial interest is in their jobs and is not aligned with
shareholders’ interest
•
One of several last ditch attempts to distract shareholders from
Couche-Tard’s all-cash premium offer for the entire company
•
A calculated move to financially engineer a temporary increase in Casey’s
stock price
•
Fails to increase fundamental value for all Casey’s shareholders
|
 28
Casey’s coercive, entrenching financing
demonstrates that Casey’s Board must be replaced
Casey’s leveraged recapitalization is a pretext for installing a coercive
financing arrangement
with
a
very
costly
“poison
put”
mechanism
designed
to
impede
ANY
takeover attempt by ANY party
•
Casey’s executed an off-market debt financing with a financing
arrangement which includes a “poison put”
mechanism designed to impede any takeover attempt
•
Coerces shareholders not to vote against Casey’s incumbent Board
•
Payable in the event, among other things:
–
Casey's shareholders decide to replace a majority of Casey’s Board
–
Couche-Tard
or
any
other
party
acquires
35%
or
more
of
the
outstanding
shares of
Casey’s
•
One voting advisory service has stated that “linking a payment of this size
to a change-in- control
trigger
is
highly
unusual
and
is
designed
to
entrench
Casey’s
Board
and
management
at
the
expense
of
Casey’s
shareholders”
–
In poison puts installed by other companies, these change in control provisions
had some “cure”
available even if a dissident or hostile bidder triggered the poison put; however,
Casey’s poison put does not have a “cure”
–
Casey’s poison put was adopted in the context of an active hostile tender
offer, making the entrenchment power of the poison put a central issue for
shareholders –
Effectively attempts to take the decision regarding the future of Casey’s
away from Casey’s shareholders
If the buyback is such a great idea, why didn’t Casey’s do it before Couche-Tard’s
offer? |
 29
Casey’s Board is misinforming shareholders
about the true cost of its coercive financing
•
If enforceable, Casey’s “poison put”
mechanism transfers substantial value from
Casey’s shareholders to Casey’s noteholders
–
Makes it approximately $100 million more expensive to acquire Casey’s
(based on current treasury rates)
–
Equates to ~$2.65 per share (after giving effect to Casey’s
recapitalization) –
18% premium to Casey’s noteholders, which represents ~ 7% of Casey’s
current equity value (pro forma for the self tender) based on current stock
prices
–
Total annualized return to noteholders
of 58% if put at 12/31/10 based on
current treasury rates
–
Detracts from the value that may be received by Casey’s shareholders
–
Deters any acquisition, not just by Couche-Tard |
 30
Interest
rate
of
4.3%
(LIBOR+300
bps)
(1)
May be prepaid at any time without penalty
Pro forma leverage: 3.1x total debt / LTM
EBITDA
–
Couche-Tard is rated BB+
Couche-Tard obtained favorable financing while
Casey’s financing is off-market
5.22% interest rate
Costly
and
unusual
“poison
put”
mechanism
designed to impede any takeover attempt by any
party
Pro forma leverage: 2.5x total debt / LTM
EBITDA
–
Casey’s is not publicly rated
Casey’s financing
Couche-Tard’s financing
(1)
Includes a 4-year LIBOR Swap Spread (i.e. to convert floating rate to fixed
rate, so comparable to Casey’s financing) of 1.3% as of 9/1/2010 per Bloomberg.
•
Couche-Tard’s financing proves that Casey's could have financed its
self-tender much more cost effectively and avoided the coercive and
expensive "poison put" it gave to its new lenders
–
Typically, debt financing used by companies like Casey's has a maximum
change of control premium in the 1% to 3% range
–
Multiple forms of cheaper debt financing were available to Casey’s to fund
its self-tender |
 31
Selected retail financings
•
Casey's new $569 million notes do not have publicly available ratings
•
Assuming a credit rating of BBB or strong BB (low investment grade or strong high
yield), Casey's new notes issue appears to be off-market
•
Relative to investment grade notes issues, the yield is almost 100 bps wide to the
two new notes issues of 2010
•
Compared to strong HY issues, Casey's notes maintain only a slight pricing
advantage •
We would have expected the "poison put" feature to drive substantially
improved pricing given the "windfall" opportunity to
investors •
If
enforceable,
the
"poison
put"
gives
noteholders
a
total
annualized
return
of
58%
if
put
at
12/31/10 based on current treasury rates
Casey’s new notes issue appears to be “off-market”
Note:
Includes 2010 issuance of strong BB and BBB area issuers.
Selected retail debt offerings
USD
Current
Date
Issuer
Coupon
Maturity
Proceeds
Yield
High
Yield
(Strong
BB
area)
5/18/2010
J. C. Penney
5.650%
6/1/2020
398.9
5.650%
4/26/2010
Advance Auto Parts
5.750%
5/1/2020
298.8
5.750%
Average
5.700%
Investment
Grade
(BBB
area)
8/24/2010
Yum Brands, Inc.
3.875%
1/1/2020
$350.0
4.060%
4/20/2010
Nordstrom, Inc.
4.750%
5/1/2020
500.0
4.110%
Average
4.085%
8/10/2020
Casey's
5.220%
8/9/2020
$569.0 |
 32
4.
Responses to Casey’s misinformation
campaign |
 33
Casey’s Board is misinforming shareholders
about Couche-Tard’s offer
Casey’s claims that Couche-Tard’s offer substantially undervalues
Casey’s and represents a low premium relative to precedent
transactions Our offer is at a premium multiple and provides a unique
opportunity for Casey’s shareholders to realize full and immediate
value –
7.5x EV / FY2010 EBITDA is above the average multiple of 6.3x for precedent
C-store transactions
–
$1.3 million EV per store is above the average multiple of $662 thousand for
precedent C-store transactions
–
32% premium to Casey’s pre-announcement 1-year average share
price –
22% premium to Casey’s pre-announcement share price
–
17%
premium
to
pre-announcement
all-time
and
52-week
high
share
price
–
Prior to Couche-Tard’s offer, Casey’s shares have never traded above
$32.83 per share |
 34
Casey’s Board is misinforming shareholders
about Couche-Tard’s offer (cont’d)
Casey’s states in their presentations that they “expect the favorable
gasoline environment to continue” –
Why? They don’t say…
Number
of
gasoline
outlets
and
“hoses”
has
held
steady
or
grown
–
Particularly true in the Midwest, where readily available and inexpensive land
results in low barriers to entry
Demand for finished motor gasoline has declined over the past five years
–
Across the U.S., 275.5 million monthly barrels were supplied as of June 2010,
compared to 281.2 million monthly barrels during the prior five years
–
This
trend
is
more
pronounced
in
the
Midwest,
where
78.8
million
monthly
barrels
were
supplied
as
of June 2010, compared to 82.9 million monthly barrels during the prior five years
Recent industry retail gasoline margins are unsustainably high and have
benefited from: –
A slow and steady decline in underlying crude prices from their peak of $145 in
July 2008 to $72 currently
–
Retail prices are sticky and do not decline immediately even when crude prices
decline. Accordingly, recent retail margins have been inflated
–
Hurricane activity in the Gulf during recent years has led to actual supply
disruptions, which resulted in spikes in retail margins
11.31¢
9.32¢
11.00¢
10.20¢
10.78¢
11.47¢
10.40¢
13.90¢
12.87¢
13.90¢
FY2001
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
Source :
Casey's public filings.
Casey’s gasoline margin per gallon |
 Casey’s Board is misinforming shareholders
about Couche-Tard’s offer (cont’d)
Casey’s claims that Couche-Tard’s offer does not reflect recent
sector performance -
Casey’s is misinforming shareholders by comparing recent share price
performance to that of Couche-Tard, Susser and The Pantry
Casey’s is more correlated to the S&P Retail Index than it is to any
other C-store company Recent C-store sector performance has been
affected by Couche-Tard’s offer –
The Pantry and Susser are rumored to be takeover targets
–
Casey’s current stock price reflects Couche-Tard’s offer and not the
unaffected stock price Since Couche-Tard made public its offer to
acquire Casey’s on April 8, 2010, the S&P 500 Index
and
S&P
Retail
Index
(1)
have
declined
9%
and
12%,
respectively
–
Implied
share
price
for
Casey’s
of
$28.76
and
$27.89,
respectively
(2)
–
We
firmly
believe
that
absent
our
offer,
Casey’s
stock
price
would
have
traded
in
line
with
the
declining
trend
Prior to Couche-Tard’s offer, Casey’s shares have never traded above
$32.83 per share Note:
As of September 1, 2010.
(1)
The S&P Retail Index is a capitalization-weighted index of 29 domestic
equities in the retail sector, traded on the New York Stock Exchange, American Stock Exchange and NASDAQ.
(2)
Implied Casey’s share price based on relative change in price vs.
pre-announcement price of $31.59. Source:
FactSet
Research Systems.
Note:
Correlation in periods ending April 8, 2010.
Statistical correlation (R²) with Casey's
10 year
5 year
3 year
2 year
1 year
S&P Retail Index
18.4%
26.7%
31.1%
31.3%
28.5%
S&P 500
25.6%
30.6%
35.4%
34.4%
30.2%
Couche-Tard
1.1%
1.8%
2.3%
1.9%
2.2%
Pantry
7.8%
18.1%
21.2%
24.0%
17.9%
Susser
NA
NA
15.3%
18.3%
10.7%
35 |
 36
Casey’s Board is misinforming shareholders
about Couche-Tard’s offer (cont’d)
Casey’s claims that Couche-Tard’s offer is opportunistic and intends
to take advantage of equity market volatility
Casey’s had since October of 2009 to seek alternatives
–
No other firm offer
to buy the company has appeared
Casey’s stock would have declined in line with the various indices, but for
Couche-Tard’s offer supporting it
Our
offer
is
the
most
attractive
strategic
alternative
available
to
Casey’s
shareholders
–
Opportunity to realize full and fair value for their shares
Our offer permits shareholders to receive certain profit, avoid risk of a
double-dip recession and receive cash for a volatile equity
We are not undervaluing Casey’s or being opportunistic
Casey’s
notes
“extraordinary
equity
market
volatility”
yet
asks
its
shareholders
to
stand pat “as the economy recovers”
53% of Casey’s shareholders were sellers at $38.00 per share
|
 37
Casey’s Board is misinforming shareholders
about Couche-Tard’s offer (cont’d)
Casey’s claims Couche-Tard’s offer would adversely impact
Casey’s other constituencies Couche-Tard’s
offer
is
very
attractive
for
ALL
of
Casey’s
constituencies
Couche-Tard’s track record with employees of companies and with local
businesses around the companies we have acquired is outstanding
–
Couche-Tard operates using a highly decentralized model, and we expect to keep
most, if not all, of the employees of Casey’s in place
–
Our decentralized model has enabled us to continue the relationships with existing
suppliers and vendors
–
In the case of Casey’s, we already have significant overlap in vendors and do
not expect any material changes in operations
Greater scale of a combined Couche-Tard and Casey’s will provide the
other constituencies of Casey’s with opportunities beyond what the
smaller platform of Casey’s currently can provide
–
Access to Couche-Tard’s platform will provide the suppliers of
Casey’s with increased opportunities to expand their sales to
convenience store chains within Couche-Tard’s portfolio
Employees looking to rise in the organization will have greater
opportunities –
Brian Hannasch of Iowa, our COO, joined Couche-Tard through an
acquisition –
Most of Couche-Tard’s operating vice presidents are from
acquisitions |
 38
Casey’s Board is misinforming shareholders
about Couche-Tard’s offer (cont’d)
Casey’s claims its performance, growth opportunities, balance sheet and human
capital can create far greater value for shareholders
Casey’s leveraged recapitalization implies they do not have good
opportunities to invest and grow the company independently
–
Putting leverage on the company limits flexibility and ability to deploy capital
for growth
–
Why didn’t they implement a recapitalization plan before
Couche-Tard’s offer? –
Casey’s
management
has
historically
operated
without
leverage
–
how
will
operating with leverage affect Casey’s management decisions going
forward? Casey’s claims Couche-Tard’s offer is an attempt to
utilize Casey’s strong balance sheet and real estate position to
subsidize the offer Our offer fully values Casey’s owned real estate
–
Minimal intrinsic real estate value (small, rural, limited alternative uses and
very little available for sale-leaseback)
We believe that no other buyer will pay a higher price for Casey’s than the
Couche-Tard offer |
 39
Next steps for shareholders
Vote FOR Couche-Tard’s nominees and proposal on the BLUE proxy card
•
Elect the new slate of independent candidates for the Board of Directors, who are
committed to maximizing value for all Casey’s shareholders
•
Vote FOR Couche-Tard’s proposal regarding new or amended
By-Laws |
 40
Appendix |
 41
A.
Couche-Tard Nominees and Biographies |
 42
Independent Nominees –
Biographical
Information
Name
Age
Qualification details
Howard W. Bates
56
Mr. Bates currently is self-employed as a business
consultant and is actively engaged in raising capital for
early stage growth and new venture start-ups. From
2007 to 2009, Mr. Bates served as President of Kratos
Defense and Security Solutions, Inc. In 1994, Mr.
Bates founded Haverstick Consulting, Inc., a defense
and technology firm in Indianapolis, Indiana, which
was acquired by Kratos Defense and Security
Solutions, Inc. in December 2007. From 1994 to 2007,
Mr. Bates served as the President and Chief Executive
Officer of Haverstick Consulting, Inc. Mr. Bates serves
or has served on the board of directors of the following
organizations: Haverstick Consulting, Inc.; Haverstick
Government Solutions, Inc., a government consulting
firm; DTI and Associates, a military and government
consulting firm; Xtreme Alternative Defense Systems
(XADS) Ltd.; Haverstick Acquisition Inc.; Rocket
Support Systems LLC; and A.C.E., a charitable
foundation for children. Mr. Bates earned a Masters in
Business Administration from Xavier University in
Cincinnati.
|
 43
Independent Nominees –
Biographical
Information
Name
Age
Qualification details
Hugh L. Cooley
60
Mr. Cooley retired from Shell Oil Products Company in
July 2009. In 37 years with Shell Oil Products
Company, Mr. Cooley held various positions,
including, among others, Vice President of Marketing
and Sales for Motiva Enterprises LLC, a joint venture
between Shell Oil Company and Saudi Refining, Inc.,
and Vice President for National Wholesale of Shell Oil
Products Company. Mr. Cooley serves or has served
on the board of directors of the following
organizations: truenorth Energy, LLC, a joint venture
between the Lyden Company and Shell Oil Company
which operates or supplies Shell franchise sites; First
Coast Energy, LLP, a gasoline service station
company; and Tri Star Energy, LLC, which is a joint
venture of Kimbro Oil Company, The Parman
Corporation and Motiva Enterprises LLC and
distributes fuel to, and operates convenience stores
under, the Daily’s Convenience Stores and Scot
Markets brands in Tennessee and Kentucky. Mr.
Cooley earned a Bachelor of Science in Marketing
from the University of Alabama.
|
 44
Independent Nominees –
Biographical
Information
Name
Age
Qualification details
Terrence Coriden
63
Since 1998, Mr. Coriden has served as an attorney
for, and part owner of, Coriden, Coriden, Andrews &
Glover, LLC (formerly Coriden Law Office, LLC). Mr.
Coriden is also currently Of-Counsel for Dugan &
Voland, LLP and serves as City of Columbus Utility
Attorney. From 2005 to 2006, Mr. Coriden served as a
hearing judge for the State of Indiana regarding the
adjudication of worker compensation matters. Since
2005, Mr. Coriden has served as an adjunct professor
at Indiana University-Purdue University Indianapolis.
Mr. Coriden currently serves on the board of directors
of Kid’s Chance Foundation and has served on the
board of directors of the Indiana Continuing Legal
Education Forum and as Chairman of the Workers
Compensation Board of Indiana. Mr. Coriden is a
member of the Indiana State Bar Association and
received his Juris Doctor degree from the University of
Toledo.
|
 45
Independent Nominees –
Biographical
Information
Name
Age
Qualification details
Mickey Kim
51
As of 2005, Mr. Kim was the Chief Operating Officer
and Chief Compliance Officer of Kirr, Marbach &
Company, LLC, a registered investment adviser, and
continues to currently hold such positions. Mr. Kim is a
director and serves on the audit committee of Kirr,
Marbach Partners Funds, Inc., which is a registered
investment company. In addition, Mr. Kim serves on
the board of directors of Heritage Fund – The
Community Foundation of Bartholomew County, a
community philanthropic organization. Mr. Kim served
on the board of directors of Salin Bank & Trust Co., a
privately held Indiana bank. Mr. Kim is a Chartered
Financial Analyst. Mr. Kim earned a Bachelor of
Science in Accounting from the University of Illinois
and a Masters in Business Administration in Finance
from the University of Chicago.
|
 46
Independent Nominees –
Biographical
Information
Name
Age
Qualification details
David O. Mann
41
Since 2002, Mr. Mann has served as a partner of
Spring Mill Venture Partners, LLC, a venture capital
firm focused on early stage, high-growth life science
and information technology investments. Previously,
Mr. Mann worked with ServiceMaster Ventures and
was a founding member of the ServiceMaster Home
Service Center, a joint venture between Kleiner Perkins
Caufield & Byers and ServiceMaster Ventures. Mr.
Mann began his career in the U.S. Navy. He serves or
has served on the board of directors of the following
organizations: HVAF of Indiana, Inc., an organization
that supports homeless veterans; BioStorage
Technologies, Inc., a company that supplies storage for
biological products; Cine-tal Systems, Inc., a television
display technology company; WebLink International,
Inc., a webmanagement software and service
company; KIPP Indianapolis College Preparatory, a
college preparatory school in Indianapolis, Indiana;
Venture Club of Indiana, a non-profit organization that
assists entrepreneurs; and TechPoint PAC, a non-profit
organization and political action committee. Currently,
an adjunct faculty member at Indiana University Kelley
School of Business (Indianapolis), Mr. Mann received
his Masters in Business Administration from Harvard
Business School and a Bachelor of Science from the
U.S. Naval Academy at Annapolis.
|
 47
Independent Nominees –
Biographical
Information
Name
Age
Qualification details
Kevin J. Martin
44
Since 2001, Mr. Martin has served as the Chief
Financial Officer of Johnson Ventures, Inc., a private
investment company. Mr. Martin serves on the board
of directors of the following organizations: JV Partners
I, LLC; Indiana Limestone Company, Inc., a quarrying
and fabrication company; Stone Center of Indiana,
LLC, a retailer of architectural and landscape stone;
Indianapolis Tennis Championships, Inc., a non-profit
organization that hosts tennis tournaments; and the
Columbus Museum of Art & Design, a non-profit
organization dedicated to arts in Columbus, Indiana.
Mr. Martin previously served on the board of directors
of Johnson Construction Materials, LLC, a
construction material provider and Central Restaurant
Products, LLC, a wholesale restaurant equipment and
supplies company. Mr. Martin received a Bachelor of
Science in Accounting and a Masters in Business
Administration in Management Information Systems
and Entrepreneurship from Indiana University.
|
 48
Independent Nominees –
Biographical
Information
Name
Age
Qualification details
David B. McKinney
55
Since 1998, Mr. McKinney has served as President
and Chief Compliance Officer of Reams Asset
Management Company, an investment management
firm. From 2003 to 2005, Mr. McKinney served on the
board of directors of Columbus Funds, Inc., a
registered investment company. In addition, Mr.
McKinney serves or has served on the board of
directors of the following organizations: the United
Way of Bartholomew County; Turning Point Domestic
Violence Services, an organization devoted to
domestic violence; Volunteers in Medicine, an
organization that provides health care services utilizing
retired healthcare professionals; Columbus Indiana
Architectural Archives; Columbus Enterprise
Development Center and Big Brothers / Big Sisters of
Bartholomew County. Mr. McKinney is a Certified
Public Accountant and received a Bachelor of Science
in Accounting from Miami University and a Juris
Doctor from Indiana University School of Law.
|
 49
Independent Nominees –
Biographical
Information
Name
Age
Qualification details
Marc E. Rothbart
47
Since 1999, Mr. Rothbart has served as Chief
Financial Officer and Senior Vice President of SIHO
Insurance Services, Inc., an employee health care
benefits company. Mr. Rothbart serves on the board of
directors of the following organizations: the Columbus
Indiana Philharmonic; the United Way of Bartholomew
County; and the Columbus Museum of Art and Design.
Mr. Rothbart also has served on the board of directors
of Art Columbus and the Child Abuse Prevention
Council. Mr. Rothbart earned a Bachelor of Science in
Management from Bentley College.
|
 50
Who is Alimentation Couche-Tard? |
 51
History of Couche-Tard
IPO
34 Store Network
3rd Public Offering
Acquired 245 Provi-Soir
Stores and 50 Wink’s Stores
Alain Bouchard Started
the Chain with one store
2nd Public Offering
304 Store Network
Entry into Ontario, Western Canada
976 Stores under Mac’s, Mike’s
Mart and Becker’s Banners as part of
Silcorp
Acquisition
Added to U.S. Midwest
287
Dairy
Mart
Stores
4th Public Offering
Entry into U.S. Midwest
225
Bigfoot
Stores
as
part
of Johnson Oil Acquisition
-
Further Penetration of U.S. Midwest
92 Dairy Mart
43
Clark
Retail
Stores
-
Acquired
Dunkin’
Donuts
Quebec Master Franchise
-
Acquired Circle K, 2nd largest
independent convenience store in U.S.
Franchise agreement
with Grupo Kaltex, S.A.
de C.V. for 250 stores in
Mexico within the next
five years
Acquisition of 236 sites
from Shell Oil Products
US and its affiliate
Motiva Enterprises LLC
Couche-Tard and Irving
Oil Limited expand
partnership to include
252 stores across Atlantic
Canada and New England
Couche-Tard
offers to acquire
Casey’s at $38.50
per share
Added a total of
496 stores
Acquisition of
43 company-
operated
and
444 franchises
from
Exxon
Mobil |
 52
2.3x
1.4x
0.8x
0.4x
1.5x
1.3x
1.0x
0.6x
At Circle K
transaction close
2004
2005
2006
2007
2008
2009
2010
Couche-Tard rapidly de-leveraged following its successful acquisition of
Circle K Total net debt / EBITDA
Recent acquisitions
Note:
2004 figures are pro forma for Circle K transaction.
(1)
Represents 50% interest in RDK Ventures LLC, a joint venture with Shell Oil
Products US (100 stores). Couche-Tard already operated 32 of these
stores prior to entering into the JV. Adjusted net debt / EBITDAR
3.7x
2.9x
2.5x
3.2x
3.2x
2.9x
2.6x
4.2x
Longstanding history of successful acquisitions
and de-leveraging
FYE April 2004
FYE April 2005
FYE April 2006
FYE April 2007
FYE April 2008
FYE April 2009
FYE April 2010 |
 53
Couche-Tard has a large presence in the U.S.
•
3,836 stores in the U.S. –
65% of total stores
•
Presence in 43 states and Washington D.C.
•
8 out of 11 divisions in the U.S.
•
36,000 employees out of 53,000 are in the U.S. –
68% of total
•
78% of revenues come from U.S. divisions
US
100%
US
78%
Canada
22%
US
83%
Canada
17%
Couche-Tard
Casey’s
Pro-forma Couche-Tard
Note:
Based on FY2010 sales as of April 2010.
+
= |
 54
The Strategic Rationale |
 55
Compelling strategic rationale
•
Creates largest independent corporate-store operator
in North America with ~ 7,400 locations
•
Expands geographic footprint across North America
•
Enhances scale and efficiency
•
Uniquely positions Couche-Tard to generate more
cash flow
•
Delivers immediate premium to Casey’s shareholders
•
Casey’s stakeholders become part of bigger
organization with benefits of a decentralized business
model empowering its employees |
 56
1,000
5,932
4,401
777
383
1,387
1,649
1,598
1,531
900
386
527
7,100
1,468
4,596
3,367
3,601
428
1,302
498
8,100
7,400
5,869
4,639
4,144
3,984
1,815
1,649
1,598
1,531
1,305
900
884
527
43
3
1,468
7-Eleven
Pro forma
Couche-Tard
Couche-Tard
Shell
ExxonMobil
Chevron
Valero
Pantry
Marathon
Casey's
ConocoPhillips
Cumberland
Farms
Tesoro
Susser
Company-operated
Affiliated / Franchises
Source:
Public filings / data, websites, press releases.
Note:
Most recent data as of July 18, 2010.
(1)
Denotes U.S. locations.
(1)
(1)
(1)
(1)
Creates the largest independent corporate-store
operator in North America |
 57
Enhanced store network
International Locations:
China,
Guam,
Hong
Kong,
Indonesia,
Japan,
Macao, Mexico, Vietnam
Company operated: 4,401
Affiliated: 1,468
Total stores: 5,869
Owned real estate: 1,300+ locations
Source: Company information.
Casey’s portfolio is geographically complementary to Couche-Tard
Total stores: 1,531
IL
IA
MN
MO
NE
ND
SD
WI
IN
65
377
436
97
296
109
104
10
Casey’s retail footprint
Couche-Tard’s retail footprint
GREAT LAKES REGION
Corporate stores: 463
Affiliated stores: 250
MIDWEST REGION
Corporate stores: 425
Affiliated stores: 65
SOUTHEAST REGION
Corporate stores: 271
Affiliated stores: 56
SOUTHWEST REGION
Corporate stores: 222
Affiliated stores: 200
ARIZONA REGION
Corporate stores: 624
Affiliated stores: 18
WEST COAST REGION
Corporate stores: 162
Affiliated stores: 321
CENTRAL CANADA
Corporate stores: 571
Affiliated stores: 199
WESTERN CANADA
Corporate stores: 287
Affiliated stores: 0
EASTERN CANADA
Corporate stores: 676
Affiliated stores: 300
FLORIDA REGION
Corporate stores: 407
Affiliated stores: 6
GULF REGION
Corporate stores: 293
Affiliated stores: 53
37 |
 58
Integration strategy
Couche-Tard expects that:
•
Couche-Tard’s decentralized business model will allow it to run
Casey’s as a stand-alone business unit
•
No significant capital expenditures will be required to integrate Casey’s
•
Casey’s store banner will remain in place (no re-branding / remodels
required) and will continue to be grown as a rural store format in the
U.S. Midwest region
•
There is a possibility to leverage Casey’s wholesale and distribution
capabilities
•
There is a possibility to implement best practices from Casey’s and
Couche-Tard
•
Limited potential synergies –
Casey’s is not a turn-around story;
currently a well operated business |
 59
S&P Retail Index constituents
($ in billions)
Ticker
Company Name
Market Capitalization
as of Sep. 1, 2010
AZO
AutoZone
$10.2
BBBY
Bed Bath & Beyond
9.8
BBY
Best Buy
13.7
BIG
Big Lots
2.6
COST
Costco Wholesale
25.5
CVS
CVS Caremark
37.9
DDS
Dillard's
1.5
DG
Dollar General
9.6
FDO
Family Dollar Stores
5.8
GPS
Gap
11.2
HD
Home Depot
48.2
JCP
J.C. Penney
4.9
JWN
Nordstrom
6.6
KR
Kroger
12.8
KSS
Kohl's
14.9
LOW
Lowe's
30.2
LTD
Limited Brands
8.1
ODP
Office Depot
1.0
RSH
RadioShack
2.4
S
Sprint Nextel
12.3
SHW
Sherwin-Williams
7.7
SPLS
Staples
13.5
SWY
Safeway
7.3
TGT
Target
37.7
TIF
Tiffany
5.2
TJX
TJX
16.4
WAG
Walgreen
26.9
WINN
Winn-Dixie Stores
0.4
WMT
Wal-Mart Stores
187.1
Source:
FactSet
Research
Systems. |