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Casey's General Stores (CASY), an operator in the convenience retail industry, is trading higher this afternoon after reporting earnings for the fiscal first quarter. I'd have to assume, however, that some of the bid is based on the idea of a takeover transaction eventually being completed, perhaps at a higher price. According to Briefing.com, earnings of 81 cents per share merely met expectations. And sales of $1.36 billion came in slightly light of the analyst call. One very positive element to the story can be found in the press release. The dividend that will be delivered in November represents a 35% increase over the previous payout.
Like I say, though, there's an arbitrage game going on with this stock. Alimentation Couche-Tard, itself an owner of convenience stores, wants to buy the company. Management of Casey's General Stores has told its shareholders to reject the tender offer from Couche-Tard.
What to do, huh? It can be awfully confusing for a shareholder caught in the middle of such noise, which is detailed in this Bloomberg piece.
At the time of this writing, Casey's General Stores was up almost 9% to a price of $42.38, which is a new 52-week high. If I currently had a significant paper profit with the equity, I would sell out and move on to something else potentially more stable. It might mean giving up some future gains, but that's simply how I would play today's action. If you don't own the stock, I don't see a reason to jump in at this point; I wouldn't want to speculate on the nature of an eventual deal involving the company.
Disclosure: I don't own any company mentioned; positions can change without notice.
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