Ampol proposes acquisition of Z Energy

Ampol has submitted a non-binding indicative proposal to acquire 100% of the shares of Z Energy for a cash offer price of NZ$3.78 per share.

Z Energy is a Wellington headquartered fuel distribution and retailing company that owns and manages over 300 fuel stations in New Zealand under the Z and Caltex brands, supplying approximately 4 billion litres of fuel annually to customers.

Ampol’s proposal follows a period of private discussions which included an initial non-binding indicative proposal of NZ$3.35 per share being submitted on 2 June 2021, with a subsequent proposal of NZ$3.50 per share submitted on 1 July 2021.

“Ampol’s offer price is a compelling value proposition for Z Energy shareholders and represents a 35% premium to last close on 26 July 2021, which is the day prior to first press speculation in relation to corporate activity involving Z Energy. It also represents a 47% premium to last close price prior to the first offer on 2 June 2021,” says Ampol.

“In addition to the offer price, Ampol’s proposal includes a dividend adjustment mechanism which permits Z Energy to pay a dividend equal to NZ 0.055 cents per share per calendar day, for each day that the transaction extends beyond 31 March 2022, up to a limit of NZ 10 cents per share.”

Ampol say it’s also willing to consider an amendment to the current proposal to include partial Ampol share consideration.

Ampol CEO and Managing Director Matt Halliday says Z Energy is a logical growth opportunity for Ampol as both companies are market leaders in their respective home markets and have very similar business models.

“A successful acquisition would create an A&NZ leader in fuel, with significant regional scale and trusted and iconic brands on both sides of the Tasman,” he says.

“Ampol has a strong track record of reliably delivering transport fuels in New Zealand, with NZ$80 million invested since 2016.

“Should a transaction proceed, Ampol believes that it will bring considerable benefits to the New Zealand market, helping to maintain fuel security and support New Zealand industry.

“Given the ongoing work of both organisations in energy transition, a combined entity would provide a new, larger platform, supporting the development of lower emissions energy solutions for customers across Australia and New Zealand.

“We look forward to working with the Z Energy team to complete our confirmatory due diligence such that a transaction can ultimately be put to Z Energy shareholders.”

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