The Work

September 17, 2010 6:30 PM

Vinson Joins the Hostile Takeover Game

Posted by Zach Lowe

Let's end the week by reviewing where we are in two increasingly hostile takeover bids. Let's start in the convenience store industry, where eyes are on the Sept. 23 meeting of Casey's General Stores shareholders. The highlight of the meeting will be a board election pitting Casey's nominees against a slate of nominees from Canadian rival Alimentation Couche-Tard, which has taken a hostile $38.50 per share takeover offer directly to Casey's shareholders, according to our prior reporting and wrap-ups from The New York Times and Dow Jones

Cravath, Swaine & Moore is representing Iowa-based Casey's, which has claimed throughout that Couche-Tard's offer is too low. Casey's also has sued Couche-Tard, accusing it of engaging in a classic pump-and-dump scheme with Casey's stock. Dewey & LeBoeuf is representing Couche-Tard in its takeover attempt, which will take center stage at next week's board election and shareholder meeting. In the latest of an endless line of press releases, Casey's made sure to note today that four major proxy advisers have recommended its shareholders vote for most (and, in some cases, all) of Casey's nominees. 

You may also know that 7-Eleven has stepped in with a rival $40 per share offer for Casey's--an offer Casey's also characterizes as too low. We've learned today that Vinson & Elkins is advising 7-Eleven in its run at Casey's. Jeffrey Chapman, the lead Vinson partner on the deal, did not return a message seeking comment. 

Of course, the convenience store hostility barely compares to the bloodbath being waged by rival industrial gas producers Airgas (the target) and Air Products and Chemicals. Air Products's hostile $5.5 billion offer for Airgas has spawned several pieces of litigation, including Airgas's unusual lawsuit against Cravath, which accuses the firm of a conflict because it dumped Airgas as a finance client shortly before signing on to represent Air Products in the takeover attempt. 

As you know by now, the war culminated in a shareholder meeting this week that largely went Air Products's way. Airgas shareholders voted to elect three Air Products-backed directors to the Airgas board, and in the process voted out Airgas CEO Peter McCausland as a director, according to our prior reporting and this thorough analysis from the NYT's Deal Professor. A majority of Airgas shareholders also backed a proposal (submitted by Air Products) to move up the next Airgas shareholder meeting to January, a move which would give Air Products a chance to snag more seats on the board sooner than would normally be possible, the NYT reports. 

But wait! Airgas claims the Air Products proposal violates Delaware corporate law and Airgas's own bylaws, according to the NYT and a complaint Airgas filed in Delaware's Chancery Court almost immediately after the shareholder vote. (Wachtell, Lipton, Rosen & Katz is representing Airgas in that complaint and in the general takeover defense.) Airgas claims the January meeting proposal needed the support of two-thirds of voting shareholders, not just a bare majority. Air Products disagrees and says shareholders have the right to determine the timing of any "annual" meeting. 

Who's right? The Deal Professor thinks it's unclear, but that Air Products might have a slight edge. And if they do, Airgas might be in trouble. 

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