Jana Is Said to Take Stake in Casey's Stores, May Push for Sale

(Bloomberg) -- Jana Partners, the activist fund run by Barry Rosenstein, has built a small position in Casey’s General Stores Inc. and is weighing whether to push ahead with an effort to get the company to sell itself, people familiar with the matter said.

The size of the stake held by the New York-based hedge fund in the convenience store operator is currently below the 5 percent threshold requiring disclosure to regulators, said the people, who asked not to be identified because the matter is private. Jana hasn’t decided whether to push for a sale of the company and it may still sell off its investment, they said.

Shares of Casey’s jumped as much as 7.7 percent Wednesday.

A representative for Jana declined to comment. A representative for Casey’s, based in Ankeny, Iowa, didn’t immediately respond to phone and email messages seeking comment.

A group of investors called on Casey’s in January to explore strategic alternatives, arguing the company is undervalued. Shares in Casey’s have fallen more than 14 percent this year, giving it a market value of about $3.6 billion.

Casey’s Chief Executive Officer Terry Handley said at the time that the company would review the request and that it was focused on creating value for investors through new initiatives to accelerate same-store growth and by returning capital to investors through dividends and share buybacks.

The investor group, which includes JCP Investment Management, BLR Partners and Joshua Schechter, said it held a $45 million stake in a Jan. 3 letter to Casey’s shareholders. The group said Casey’s could fetch from $150 to more than $170 a share in sale based on recent transactions in the convenience store sector.

Casey’s fell 1.4 percent to $95.39 in New York trading at 3:17 p.m. Wednesday.

The investor group argued the company has significantly underperformed the industry leader, Alimentation Couche-Tard Inc., since it was approached by the Laval, Quebec-based company in 2010 about a takeover. That takeover offer expired in September of that year.

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