Couche-Tard lifts Caltex takeover offer

Alimentation Couche-Tard says its new takeover offer for Caltex is its ‘best and final price’ after two previous bids were rejected.

Canada’s Couche-Tard says it has made its best and final offer for Caltex. Picture: Peter Wallis

The highly-charged takeover battle for fuel retailer Caltex has taken on fresh momentum after Canadian giant Alimentation Couche-Tard nudged its initial $8.6 billion offer higher, giving it greater distance from a potential looming bid from investment giant Macquarie and the UK’s EG Group.

The new “best and final price” takeover proposal takes Caltex’s takeover value to $8.87 billion.

Couche-Tard is still conducting due diligence on Caltex, after receiving access to select non-public information, despite the Caltex board failing to support two previous offers, the second at $34.50-per-share valuing the company at $8.6bn.

But on Thursday the Canadian group applied more pressure to the Caltex boardroom by revising its bid to $35.25 cash per share less any dividends declared or paid by Caltex, valuing the fresh takeover bid at $8.87 billion.

Caltex shares rose 2.4 per cent or 11c on Wednesday, to $33.73. The stock has risen around 40 per cent since its lows in August last year.

Caltex said Couche-Tard has made the revised proposal following provision of selected non-public information by Caltex.

The revised proposal is subject to a number of conditions, including completing due diligence; agreeing the terms of a scheme implementation agreement; no material asset acquisitions or divestments, capital raisings, capital management initiatives or similar transactions; unanimous recommendation by the Caltex board and approval of the Couche-Tard board.

Completion of any agreed transaction will be subject to Foreign Investment Review Board approval.

“Couche-Tard has indicated that its revised price is its best and final price in the absence of a competing proposal,’’ Caltex said.

“The Caltex board is currently considering the revised proposal, including obtaining advice from its financial and legal advisers. The revised proposal is subject to various conditions and there is no certainty that it will result in a change of control transaction.”

Couche-Tard had previously considered forming its own consortium including IFM Investors and Trafigura, indicating the lead suitors are likely to split up Caltex should they ultimately prevail with offers.

Neither Couche-Tard or EG control any refining assets as part of their own portfolios.

Caltex on January 8 flagged a potential break-up of its wholesale and retail fuel arms, confirming it has fielded multiple approaches for all or some of its assets, including one from EG Group.

US energy major Chevron is also being closely watched after it paid $425m in December to scoop up Puma Energy — Australia’s largest independent fuel retailer — just four years after selling its stake in Caltex.

EG has grown rapidly in Europe, the US and Australia, building a network of about 5000 fuel stations and convenience stores in a series of debt-fuelled acquisitions capped by last year’s $1.7bn deal for Woolworths’ network of 540 petrol stations.

It has debts of about £7.3bn ($14bn), according to Bloomberg, levels that may constrain a serious offer for Caltex.

The bidding war for Caltex is the latest in a flurry of deal-making in the fuel station and convenience store space. It includes EG’s acquisition of Woolworths, Viva’s move on Liberty, Caltex’s sale of 25 of its own sites as development properties, and Charter Hall’s $840m sale and leaseback deal over 49 per cent of 225 BP fuel stores.

Caltex Australia controls about 34 per cent of Australia’s wholesale fuel market, along with 25 per cent of the country’s fuel refining capacity and up to 17 per cent of retail fuel sales.