* Expects to accept about 13.2 mln shares at $38/share
* Says expects 2011 EPS of $2.72
* Sees 2012 EPS of $3.31 (In U.S. dollars unless noted)
By Solarina Ho
TORONTO, Aug 26 (Reuters) - Casey's General Stores (CASY.O) concluded a $500 million recapitalization plan on Thursday that was designed to thwart a $1.9 billion hostile takeover bid from Canada's Alimentation Couche-Tard (ATDb.TO) for the U.S. convenience store chain.
Casey's, a U.S. Midwest chain that operates more than 1,500 stores, said it expected to buy about 13.2 million shares from its own shareholders at $38 a share as a result of its modified Dutch auction self-tender offer, which expired on Wednesday.
That represents roughly 25.8 percent of Casey's shares outstanding as of July 23, 2010.
Casey's buyback offer was substantially higher than Couche-Tard's latest sweetened offer of $36.75 a share and sparked a strong response with shareholders tendering 28.2 million shares altogether.
Casey's modified Dutch auction was structured such that stockholders could tender their shares within the specified price range of $38 and $40 a share and the price would be determined based on the number of shares tendered and the prices specified by the tendering shareholders.
"The recap was a good way for Casey's to fend off Couche-Tard. It's a good defense mechanism," said Miller Tabak & Co analyst Michael Broudo.
"We continue to believe that our stock is undervalued at recent trading levels and that Casey's is creating far greater value than is reflected in Couche-Tard's inadequate $36.75 per share offer," Casey's Chief Executive Robert Myers in a statement."
Casey's, which has repeatedly spurned Couche-Tard's advances, said consensus earnings estimates would increase to $2.72 a diluted share in 2011 and rise to $3.31 a diluted share in 2012 due to the recapitalization plan.
Couche-Tard, which operates more than 5,800 stores and is one of North America's largest convenience store operators, has criticized Casey's for not engaging in discussions.
Couche-Tard's takeover offer expires on Aug. 30. Analysts have expressed doubt the Montreal-based company will raise it.
"I would think that they had their chance to increase their bid at a price that would've made sense for everybody. And they didn't do it. I think they are fiscally very prudent," said Broudo. "They're almost fiscally prudent to a fault."
Couche-Tard is still running a proxy fight to replace Casey's board when shareholders meet for their annual meeting on Sept. 23, but Broudo said: "It's really hard for me to see what kind of leverage (Couche-Tard has)."
Casey's shares were 18 cents lower at C$37.11 on the Nasdaq on Thursday midday. Couche-Tard shares were down 13 Canadian cents at C$22.58 on the Toronto Stock Exchange.
$1=$1.06 Canadian Reporting by Solarina Ho; editing by Peter Galloway