7-ElevenInc. is making its boldest move to date in convenience store consolidation by offering $2 billion for a smaller Midwestern rival.
The Dallas-based retailer has offered $40 a share to acquire Iowa-based Casey's General Stores Inc., which would give it an immediate 1,531-store boost to its count of 6,500 U.S. locations.
Casey's has been fighting off unsolicited offers since April from Canada-based Alimentation Couche-Tard Inc., whose most recent offer was $38.50 a share.
On Wednesday, Casey's said its board of directors was reviewing an offer from an unnamed third party for $40 a share. That offer is from 7-Eleven, according to people familiar with the matter quoted by The Wall Street Journal.
7-Eleven, a wholly owned subsidiary of Tokyo-based Seven and I Holdings Co., declined to comment Wednesday. The company was also mum earlier this summer when it was rumored to be going after a large acquisition.
Its chief executive, Joe DePinto, has been saying for several years that the company wants to grow its footprint by expanding the number of franchisees and converting existing independent stores to the 7-Eleven brand. It has also made acquisitions, but none this large.
Casey's, which was founded in Iowain 1959, had sales last year of $1.18 billion. The chain's stores are concentrated in nine Midwestern states and mostly in rural markets.
Casey's annual meeting is Sept. 23, and Couche-Tard is putting up its own slate of directors. Casey's said analysts have valued the company at $45 a share without reflecting a takeover premium.
Casey's says it has the highest same-store sales growth in the industry, with 27 consecutive quarterly increases.
According to annual rankings in Convenience Store News, both 7-Eleven and Couche-Tard can claim No. 1 spots based on different measures.
U.S. sales are pretty close. 7-Eleven had $13.7 billion in sales last year, and Couche-Tard's U.S. sales were $12.8 billion.
The longtime leader in total stores, 7-Eleven is also the leader in franchised/licensed outlets. More than 4,800 of its 6,523 stores are now franchised.
Couche-Tard, based in Laval, Quebec, runs the largest number of corporate-operated stores. It operates a total of 3,455 stores in the U.S., 2,910 of which are corporate-owned. It made its biggest U.S. move in 2003, the acquisition of Circle K.
