Caltex shareholder Merlon Capital has attacked the company over its decision to reject the Canadian Couche-Tard bid and placed a valuation of up to $38 a share on the fuel distributor.
The move comes as Caltex management outlined its plans for future growth at an investor day, explaining the Couche-Tard rejection and affirming guidance for this year.
Earlier this week the Caltex chair Stephen Gregg told Couche-Tard its $34.50 offer was too low, but left open the chance it could return with limited due diligence with a higher offer.
The bidder is yet to respond.
READ MORE: Caltex yet to hear back from Canadian bidder | Caltex rejects Couche-Tard takeover bid | Canada’s Couche-Tard makes move on Caltex
Merlon, which holds 1.9 million Caltex shares worth $65m, noted the six non-executive directors of the company held just 38,311 shares in total, worth around $1.3m, compared with director fees totalling $1.7m.
The Caltex board said the best point to measure the $34.50 bid against was the $29.75 a share price at which the stock closed after unveiling its plan to float half its retail sites.
But in its letter to the company, Merlon attacked the decision not to let Couche-Tard do due diligence.
It said the decision was based on “over confidence in your ability to implement what is now a long standing retail strategy”.
Merlon’s valuation is between $23 and $38 a share, with the later valuing Caltex’s retail at 15 times earnings and the former at 10 times, while fuel and infrastructure is valued at 12 times earnings under the $38 offer, against eight times earnings for the $23 offer.
But Caltex chair Stephen Gregg said the 15 per cent premium on offer was too low and if a 30 per cent premium was offered, Couche-Tard would be offering $38 plus a share.
The company said it had not heard from the bidder since the announcement.
Outgoing chief executive Julian Segal declined to say when a new boss would be named, but said he would be gone by the middle of next year.
This is another reason that Merlon wants Caltex to negotiate a deal with Couche-Tard: the company effectively has no chief executive.
But this contention was rejected by Segal, who said he was still in control.
Fuel and infrastructure boss Louise Warner is the big favourite to take the job because an outsider would be reluctant to join, given the chance of a takeover.