Should Casey's General Stores sell itself?

Shareholders have pushed the company to look at its options

A Casey’s General Store sign. (Gazette file photo)
A Casey’s General Store sign. (Gazette file photo)

A group of shareholders in Iowa-based Casey’s General Stores are pushing the gas station and convenience store chain to sell itself.

The shareholders sent a publicly released letter Wednesday to Casey’s in which they called the company’s shares “undervalued” and said it is underperforming its competitors. The letter’s authors include JCP Investment Management LLC, BLR Partners LP and Joshua Schechter, who said they collectively own $45 million of Casey’s stock. Casey’s said in a news release that the letter writers’ stake amounts to about one percent of its shares.

“We believe that Casey’s board should immediately engage a financial adviser to explore all strategic alternatives, including a potential sale, merger or similar transaction in order to maximize shareholder value,” the shareholders wrote in the letter.

Based in Ankeny, Casey’s operates more than 2,000 stores in 15 states.

JCP, BLR and Schechter argued the company is undervalued because of a rapid expansion. The expansion “coupled with seeming declining returns on invested capital is symptomatic of a company that has been unable to manage growth effectively,” they said.

Casey’s President and CEO Terry Handley said the company’s board will review the letter. Handley said Casey’s “is focused on generating increased long-term value for shareholders.”

“With the combination of the company’s growing acquisition pipeline, new store construction activity, new initiatives aimed at enhancing operations — such as digital engagement and price optimization projects — Casey’s expects to deliver substantial value for its shareholders,” he said.

Casey’s stock closed at $120.21 a share Wednesday and is up about 2.2 percent in the last year.

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In 2010, Casey’s rebuffed acquisition attempts by Canada-based Alimentation Couche-Tard and 7-Eleven, both convenience store chains.

l Comments: (319) 398-8366; matthew.patane@thegazette.com

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