Convenience store operator and oil refiner, Caltex Australia says the $8.6 billion, $34.50 a share surprise from Canadian group, Alimentation Couche-Tard (ACT) isn’t enough and like Oliver Twist, wants more.
Punters are starting to wonder if there will be a higher offer from the Canadian convenience store giant, ACT or a rival group with shares in Caltex edging higher again yesterday to go with Tuesday’s solid rise after the approach was revealed.
Shares in Caltex closed up 13.5% at a 15-month high of $33.79 after it confirmed a second unsolicited bid from Canadian convenience store giant, Alimentation Couche-Tard (ACT) at a higher price of $8.6 billion.
Caltex has received a conditional proposal from Alimentation Couche-Tard. The proposal permits Caltex to pay a special dividend, neutralising the attractiveness of alternative strategies further distributing franking credits, Credit Suisse observes.
Caltex proposes to sell a 49% interest in 250 freehold fuel retail sites, representing most of its freehold retail holdings. Superficially, the proposed divestment of the freehold retail sites is attractive and from an economic perspective Credit Suisse is favourably disposed to monetising the assets.
Credit Suisse observes the first quarter trading update has confirmed previous disclosures regarding margin compression in fuel retailing and poor refiner margins. The broker believes retail fuel margins are likely to remain an uncertain factor for the remainder of the first half.
Caltex has guided to first quarter convenience retail earnings (EBIT) of $160-180m. UBS suspects some of the retail margin headwinds will abate in the second half as crude prices drop and US production lifts.