Casey’s General Stores shareholder JCP encourages exploration of alternatives
JCP Investment Management, BLR Partners and Joshua Schechter, which together are “significant shareholders” of Casey’s General Stores (CASY) that collectively own approximately $45M of the company’s common stock, issued an open letter to Casey’s shareholders, stating in part:
“We believe Casey’s shares are significantly undervalued as they do not reflect the true earnings power and full real estate value of the Company’s irreplaceable fleet of 2,000+ stores…Rapid consolidation has been ongoing in the convenience store industry over the past five years. We have played a constructive role in this consolidation while serving as directors during the successful sale of The Pantry, Inc. to ATD in 2014 and as part of a settlement agreement with CST Brands, which resulted in a sale to ATD in 2016.
Based on the above transaction multiples, we believe Casey’s shares could be worth from $150 to greater than $170 per share to a potential acquirer. We believe this is realistic given the significant synergies and real estate value that Casey’s offers.
We note that ATD is projecting $125M in synergies for its acquisition of Pantry and between $150-200M in synergies for its acquisition of CST, both of which were smaller than Casey’s and owned less real estate…We do not believe that waiting for an increase in share price in the face of significant declining EBITDA is the prudent path to take considering that we believe that Casey’s could potentially realize $150 to greater than $170 in a sale today.
We believe that Casey’s Board should immediately engage a financial advisor to explore all strategic alternatives, including a potential sale, merger or similar transaction in order to maximize shareholder value.”
CASY last traded at $112.39.
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