By Solarina Ho and Pav Jordan

TORONTO (Reuters) - Casey's General Stores said Tuesday it might agree to talks withAlimentation Couche-Tard if the Canadian companywould raise its $38.50-a-share takeover offer for the U.S.convenience store operator.

"We are, of course, willing to extend to an interestedparty the opportunity for discussions regarding a potentialconsensual transaction, provided that the starting point forsuch discussions is acceptable," Casey's said.

In a letter to Couche-Tard, which operates 5,800convenience stores in the United States and Canada, Casey'sChief Executive Robert Myers said the company planned toproceed with its annual meeting on Sept. 23, but that it wouldcontinue to evaluate the timing of the meeting.

Couche-Tard has asked Casey's to postpone the meeting,having put forth a list of its own nominees to Casey's board.

The Akeny, Iowa-based chain is already in talks with7-Eleven, the world's biggest convenience store chain with over31,400 stores, after the Japanese company offered $2.03billion, or $40 a share, for Casey's.

A banker familiar with the deal said it would beinteresting to see how the Japanese will proceed, noting thatthey are usually quite slow in making decisions.

"This is one of the best properties available and held by apublicly traded company. So there is some interest," he said.

Casey's, which operates over 1,500 stores in the U.S.Midwest, and Couche-Tard have been embroiled in an increasinglyhostile takeover bid.

In the latest exchange between the two companies, Casey'saccused Couche-Tard of "increasingly utilizingmisrepresentations and mischaracterizations in its publicstatements," calling them "entirely unfounded and absurd."

Casey's reiterated its objections to Couche-Tard's offerand the accompanying conditions, adding that the Montreal-basedcompany gave no indication as to whether it would waive orwithdraw the conditions and that it had not provided enoughinformation about its proposed financing.

Couche-Tard could not be immediately reached for comment.

Casey's letter to Chief Executive Alain Bouchard was inresponse to a letter from Couche-Tard on Friday that saidCouche-Tard was willing to consider raising its bid for Casey'sif the process was fair.

Couche-Tard shares closed unchanged at C$23.00 on theToronto Stock Exchange. Casey's climbed 26 cents to $44.24 onthe Nasdaq.

($1=$1.03 Canadian)