Caltex Rejects Couche-Tard Bid But Leaves Door Open to Higher offer
December 02 2019 - 5:26PM
Dow Jones News
By Robb M. Stewart
MELBOURNE, Australia -- Transport-fuel supplier Caltex Australia
Ltd. (CTX.AU) has rejected a US$5.8 billion takeover approach from
Alimentation Couche-Tard Inc. (ATD.A.T), but left the door open for
the Canadian convenience-store operator to return with a raised
bid.
In a statement Tuesday, Caltex said the offer from Couche-Tard
undervalues the company and doesn't offer compelling value for its
shareholders. However, it said its board has offered Couche-Tard
selected non-public information to allow it to revise its
proposal.
The offer, which values Caltex at 8.6 billion Australian dollars
(US$5.83 billion), was unveiled late last month just a day after
the Australian company said it planned to float an up to 49% stake
in 250 of its core gas-station sites in Australia, which would
release significant capital that adds to proceeds from 50 sites it
is seeking to sell.
Couche-Tard in 2017 pledged to expand its fuel and convenience
store operations in the Asia-Pacific region. On said Nov. 18 it
made a confidential non-binding offer to the board of Caltex of
A$34.50 a share, an increase on an offer of A$32 that was rejected
a month earlier.
The fresh offer marked a 16% premium to the last closing price
for Caltex's shares before the bid was made public, which Caltex
said was too low.
It also said the offer price would be less than A$34.50, reduced
by the value of the dividend it expects to pay for the second half
of 2019 and that Couche-Tard has materially overestimated the
potential cash benefit to most Caltex shareholders that could be
expected from distributing unused franking credits, a benefit that
company's can apply to dividend payouts that effectively prevents
double-taxation for investors.
Caltex said the offer of non-public information to Couche-Tard
was conditional on the companies signing a confidentiality
agreements, and there was no certainty talks would result in a
revised bid.
Caltex, which traces its roots to the listing of oil importer
Ampol on the Australian Securities Exchange in the late 1940s, is a
refiner, importer and supplier of fuels and lubricants with a
network of about 1,800 company-owned or affiliated sites across
Australia. In mid-August, Caltex said Managing Director and Chief
Executive Julian Segal planned to step down after about a decade in
the role once a new leader was selected.
Couche-Tard has almost 9,800 convenience stores throughout North
America, including more than 8,500 selling motor fuel, and also has
retail operations in Scandinavia, the Baltics, Ireland, Poland and
Russia. It also has licensing agreements for about 2,250 stores
operated under the Circle K brand in countries including Cambodia,
China, Indonesia, Mongolia and New Zealand.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
December 02, 2019 18:11 ET (23:11 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Caltex Australia (ASX:CTX)
Historical Stock Chart
From Sep 2024 to Oct 2024
Caltex Australia (ASX:CTX)
Historical Stock Chart
From Oct 2023 to Oct 2024