EG open to joint bid for Caltex

British petrol and food retailer EG is believed to be continuing to assess whether to launch a rival takeover bid for Caltex Australia, and it is understood a joint bid is not yet totally out of the question.

While EG’s advisers, which include Jefferies, Citi and Bank of America, are trying to establish ways for the company to buy the $8.6 bn Caltex business in one line, it is understood that the door has been left open for other parties to come forward and be part of a deal.

One suggestion is that a Japanese convenience store operator had been talking to EG, but it is unclear what company could be involved.

Convenience store chains operating in Japan include the Mitsubishi-owned Lawson and Itochu’s FamilyMart, competing against Circle K, which is owned by Alimentation Couche-Tard, which is bidding for Caltex.

Interestingly, Luminis Partners has been mentioned as an adviser that could be involved, but it is unclear whether it is assisting the EG camp or casting its eye over Caltex Australia for other parties, possibly private equity.

Luminis is not thought to be working with any Japanese groups.

Alimentation Couche-Tard is believed to be progressing with its due diligence on Caltex Australia, despite the board failing to support its $34.50-per-share bid for the company that put its value at $8.6bn.

The obvious hope is that the Canadians will sweeten the deal once they have further information on the company.

Some wonder whether a deal will gain approval from the Australian Competition & Consumer Commission or the Foreign Investment Review Board.

In 2009, the Australian competition regulator rejected Caltex Australia’s proposed $300m takeover of Exxon Mobil’s Australian petrol stations, and more recently, BP was knocked back in its attempts to buy Woolworths’ petrol station portfolio, which was instead acquired by EG.

Caltex Australia has its petrol retailing business, real estate and a wholesale fuel business, thought to be worth about $2bn, along with related infrastructure.

It owns the former Kurnell refinery site in NSW along with the Lytton refinery up in Brisbane.

Some suspect that should Alimentation Couche-Tard opt to pursue the asset, it would lift its offer price to about $36 per share.

Meanwhile, should EG attempt to acquire Caltex Australia, it will add to the 540 fuel convenience sites it bought from Woolworths in 2018 for $1.725bn.