Front Running Your Own Hostile Takeover Bid?
Just when I thought the stock market couldn’t get any dirtier, it did. A hostile takeover bid by Alimentation Couche-Tard to buy Casey’s General Stores was interesting…especially in this business enviroment. The bid, something fresh in this business environment, is made even more interesting by the fact that Couche-Tard front ran its own hostile takeover. What?!
$36 Offer
Alimentation Couche-Tard put up a bid of $36 per share for Casey’s General Store stock. But, before it did, the firm, which already owns a minority stake in Casey’s, upped the ante to 3.9% of the common stock. In doing so, Couche-Tard purchased shares in a firm it wished to buy for $36 per share at a price of just over $31.40. Couche-Tard netted $10 million on the deal, able to buy stock before making the news public, practically front-running the public as well as itself.
Taking a Profit
It wouldn’t be out of the ordinary for a firm to up its stake before submitting a tender offer to buy a company it wants. However, Couche-Tard wasn’t interested in buying up some of the firm cheap. No, it sold it’s $31.44 shares for $38.43, raking in a profit greater than $10 million. The firm contests that the deal helps hedge the risk that the offer isn’t accepted, even though it’s gearing up for an intense proxy battle.
The Point Is..
The point is this: at what point are we going to say enough is enough on outright theft and fraud. As far as I’m concerned, what Couche-Tard did was entirely fradulent, front-running its own offer and banking in the process. At the very minimum, it is very dirty business, and I don’t want any part of it. Tell me what you think…scandalous?
