The takeover defense adopted by Casey’s General Stores Inc. has managed to finagle another 75 cents a share from the company’s Canadian suitor.

That might be a good thing, to date, for shareholders. On the other hand, the board’s decision to balk at previous offers from Alimentation Couche-Tard Inc. could thwart the whole deal.

For its part, Casey’s has argued that it can increase shareholder value by focusing on its business plan. It posted in-store sales figures last month that were highlighted in part by margins on the sales of gasoline that exceeded management forecasts.

On the other hand, the company might be missing an opportunity to serve its shareholders by getting the best deal possible from Couche-Tard, the largest operator or convenience stores in North America. The company hopes to bolster its holdings by adding the roughly 1,500 stores that Casey’s operates.

“In the world of finance, we teach our students that the shareholders own the company,” said Travis Sapp, associate professor of finance at Iowa State University.

On that foundation, he does not hold much stock in Iowa laws that say the board of a publicly held company has to vote to allow a takeover bid in order for it to proceed. Iowa law also throws other barriers in the way, including whether the takeover or merger would be harmful to vendors and communities.

At least two shareholders agree that they should have the ultimate say in the takeover. Two lawsuits have been filed in Polk County District Court that seek to block the board of directors from interfering in the process.

Couche-Tard has taken a two-pronged approach to its bid to control 100 percent of Casey’s. It has made a tender offer directly to shareholders, bumping its offer to $36.75 a share from the original $36 a share first announced in April.

In addition, the company will attempt to elect a slate of officers favorable to its takeover bid during Casey’s annual meeting next month.

Both sides also are arguing their cases in federal court in Des Moines, where Casey’s fired the first salvo, claiming that Couche-Tard violated securities laws by engaging in a “pump and dump” in which it precipitated an increase in Casey’s stock price by announcing the takeover, then sold shares it held in the company.

On April 9, Couche-Tard sold more than 1.9 million shares of Casey’s stock just hours after announcing it hoped to buy the company. Couche-Tard netted $10 million on the sale of stock that it had been acquiring since last year.

However, Sapp said he saw little in the way of market manipulation in Couche-Tard’s actions, although he thought the roughly $8 bump-up in Casey’s stock price following the takeover announcement seemed a little steep.

“The fact that they sold it seemed perfectly rational,” Sapp said. “Any company, from a finance standpoint, should jump at a chance to turn a profit, providing the transaction was legal. You could probably argue that it was a secondary reaction, not a scheme to make a quick $10 million or so.”

Couche-Tard has countered Casey’s claims in the federal lawsuit by challenging the constitutionality of the state laws Casey’s board is using to block the takeover. A hearing is scheduled for Aug. 23 on issues raised in the court filings.

Couche-Tard argues in court documents that state laws allowing the board of directors of public companies to take several steps to block hostile takeovers violate an amendment to the Securities and Exchange Act of 1933 and also the commerce clause of the U.S. Constitution. Casey’s board announced earlier this month that it had created a scheme in which shareholders could purchase the company’s stock at a fraction of its market price if an individual or other party acquired 15 percent of the company’s shares. The “acquiring” entity would be prohibited from buying the reduced-price stock. In addition, Casey’s extended the employment contracts and sweetened the severance packages of its senior officers, with both moves going into effect in the wake of a takeover.

The subject of a merger came up during a telephone conversation Oct. 6, 2009, between Casey’s President and CEO Robert Myers and Couche-Tard CEO Alain Bouchard, according to a court document filed by Casey’s.The conversation was supposed to be about credit card interchange fees. Instead, Bouchard asked about an alliance and was told that Casey’s was not interested. In another telephone conversation on Nov. 16, Myers again told Bouchard that his company was not interested in a merger, but that Couche-Tard should present a proposal that Myers could present to Casey’s board of directors.

Casey’s board has twice rejected the offer from Couche-Tard. When the Canadian company announced the sweetened bid on July 22, Casey’s asked its shareholders to sit tight while it evaluated the offer.

Casey’s board has maintained throughout the process that Couche-Tard’s offer undervalues their company.

However, Sapp said it is difficult to know at this point whether the board is looking out for the shareholders’ best interests.

“There is an ongoing debate over takeover defenses,” Sapp said. “Do they get a better deal for shareholders or do they insulate top management? They probably stop too many takeovers from happening that would be beneficial to shareholders.”

He it is difficult to know what Casey’s board means when it says the Couche-Tard offer “significantly undervalues” the company.

“There are really two values for the company: what it is worth to dispersed shareholders based on their claim to its current projected cash flows, and what it is worth to Couche-Tard to have complete control of the firm and its assets in order to extract expected synergies from the combined firm,” he said.

“The difference in the two values is the control premium. Couche-Tard will need to give a sufficiently large fraction of this control premium to Casey’s shareholders to entice them to tender (their stock), while still reserving some of the expected gain for its own shareholders. If the bid fails, and in the absence of other bidders, I would expect Casey’s share price to decline several dollars from its current bid value back to its stand-alone value. So when Casey’s says the Couche-Tard bid significantly undervalues the company, this should be understood only in the sense of dividing up the control premium.”

Sapp also said that he would have expected a Couche-Tard bid of nearly 30 percent more than Casey’s closing price of $31.59 on April 8, the day before the bid was announced.

He also noted that Casey’s leaves a lot of shareholder value on the table because of its relatively low debt level of about 10 percent.

“On average, companies are 35 to 40 percent leveraged,”Sapp said. “The advantage of debt is the tax write-off it allows. So, Couche-Tard could take on quite a bit of debt in attempting to acquire Casey’s and still provide significant value for shareholders.”

After all, he said, the order of the day for any corporation is to take risks and create value for shareholders.