Caltex Australia (ASX: CTX) is the recipient of yet another takeover bid, in what has been dubbed a “bidding war” for the retail fuel chain, with this latest offer coming from UK-based EG Group and comprising $3.9 billion cash plus securities.
EG Group joined the fray on Wednesday morning after making an official but non-binding $3.9 billion cash offer for Caltex’s convenience retail business.
Caltex shareholders would also receive a security in a new entity to be named Ampol for each Caltex share held.
Under this offer, EG Group estimates Caltex shareholders would receive about $15.62 in cash each, plus the scrip for scrip amount.
The bid effectively splits Caltex’s business, with EG Group also indicating it is prepared to consider acquiring up to 10% of the new Ampol entity for additional cash consideration.
Caltex retail outlet IPO plans
Although more complex than the current offer on the table from Canadian major petrol and convenience store retailer Alimentation Couche-Tard Inc (Couche-Tard), it is in keeping with Caltex’s strategy to split its business.
In late November last year, Caltex revealed plans to spin out 250 core retail business freehold sites in an IPO valued at $1 billion – much less than EG Group’s $3.9 billion offer for the assets.
Under this arrangement, Caltex planned to maintain a 51%-stake in the freehold sites, which were to be placed into a property trust.
At the time, Caltex chief financial officer Matt Halliday said the IPO would provide an opportunity for Caltex to “optimise” its financial structure, while releasing “significant capital” for the company to fund future growth opportunities.
Couche-Tard’s repeat offers
EG Group’s proposal follows repeat offers for Caltex from Couche-Tard, with the initial offer of $32 per share rejected on the basis the price was inadequate.
Since then Caltex and Couche-Tard have remained in discussions, which led to another rejected bid, and resulted in Couche-Tard making an “improved” proposal earlier this month.
On the 13 February, Couche-Tard proposed to acquire all the shares in Caltex via a scheme of arrangement with a cash price of $35.25 per share – valuing the Caltex at $8.8 billion.
At the time, Couche-Tard stated its improved offer was its “best and final price” in the absence of a competing proposal.
Couche-Tard is currently carrying out due diligence into Caltex’s financial situation and assets.
While RBC Capital Markets analyst Ben Wilson claims at this stage EG Group’s offer appears inferior to Couche-Tard’s, he admitted it remains “open to interpretation”.
Market speculators will be watching closely to see if Couche-Tard ups it offer for Caltex.