Crunch looms for Couche-Tard’s takeover offer for Caltex

A Caltex servo.

Caltex could be set to make an announcement next week on whether its takeover suitor, Alimentation Couche-Tard, remains in pursuit of the business.

The Canadian fuel retailer, which offered $8.8bn for Caltex in February, is understood to have had finalised its due diligence in Australia before travel restrictions put in place to cope with the coronavirus outbreak.

Due diligence is expected to be finished next week, which will likely see Couche-Tard provide more clarity to Caltex as to how it wants to proceed with its proposed takeover.

Couche-Tard offered $35.25 per share for Caltex and its shares are now at about $23.45.

The thinking is that Couche-Tard would struggle to obtain debt for an acquisition in the current environment and would need to lower the price of its offer should it proceed, given the target’s price has fallen so substantially and market conditions have changed.

Another line of thought is that Couche-Tard could now be looking elsewhere for opportunities and walk away from Caltex, given the demise of the value of its rivals in other parts of the world.

EG Group, which bought Woolworths’ petrol station portfolio last year for $1.725bn, could be a target, which ironically was itself angling for a $3.9bn acquisition of Caltex assets, rivalling Couche-Tard’s offer.