Ampol has entered into a binding scheme implementation agreement to acquire 100% of the shares of Z Energy.
This follows the completion of confirmatory due diligence, which commenced in late August.
Under the terms of the scheme, Ampol will acquire 100% of the shares of Z Energy for a cash offer price of NZ$3.78 per share. Ampol’s offer price represents a 35% premium to last close on 26 July 2021.
Ampol’s offer includes an adjustment mechanism where it will pay an additional cash amount of NZ 0.055¢ per share per day for each calendar day that completion of the transaction extends beyond 31 March 2022, up to a limit of NZ 10¢ per share.
Ampol has agreed to Z Energy paying a dividend amount of NZ$0.05 per share with respect to the half year which ended 30 September 2021, while holding the offer price constant. Other than that dividend amount, says Ampol, any other dividends declared or paid by Z Energy prior to transaction completion will reduce the offer price by the equivalent amount.
The Z Energy Board of Directors has unanimously approved the scheme. They unanimously recommend that its shareholders vote in favour of the scheme and each of the Z Energy directors will vote the shares they control in favour of the scheme. This is subject to there being no superior proposal and the Independent Adviser’s Report concluding that the consideration is within or above the valuation range for Z Energy’s shares.
The scheme is subject to certain conditions, including obtaining New Zealand Commerce Commission clearance and Overseas Investment Office approval. As part of obtaining New Zealand Commerce Commission clearance, Ampol has committed to divest its existing New Zealand business, Gull, in full to ensure any potential competition law issues are fully addressed as a result of the scheme.
Commenting on today’s announcement, Ampol CEO and Managing Director Matt Halliday says: “Ampol has a strong track record of safely and reliably delivering transport fuels in New Zealand and the completion of this transaction will bring considerable benefits to New Zealand. The additional scale, when combined with our established trading and shipping capabilities, regional supply chain and broader fuels infrastructure will bolster New Zealand’s fuel security as the local market transitions to fuel imports.
“Given the ongoing work of both organisations in energy transition, a combined entity will also provide a new, larger platform to support the development of lower emissions energy solutions.”
The transaction is targeted for completion in the first half of 2022, with the Z Energy shareholder vote expected to occur early in 2022.