Caltex Australia has confirmed that it has received an $8.6 billion “unsolicited, conditional, confidential, non-binding and indicative proposal” from Canadian convenience store operator Alimentation Couche-Tard Inc. (ACT) to acquire all shares in the company.
The indicative cash price per share is $34.50, less any dividends declared by Caltex.
This proposal follows an earlier approach from ACT at an indicative cash price of $32 per share. This was rejected on the basis that the indicative price was inadequate.
Discussions are at a preliminary stage, says an ASX statement. The proposal is said to be highly conditional and there is no certainty that these discussions will result in a transaction.
Caltex says its board will consider the proposal, including obtaining advice from its financial and legal advisers.
Plans for property IPO
The announcement follows Caltex’s announcement on Monday of its intention to undertake an initial public offering (IPO) of up to a 49 per cent interest in 250 core convenience retail freehold sites. The company says this is not related to the proposal with ACT.
Caltex proposes to retain a majority interest in the freehold sites. This would be placed into a property trust and enter into a long-term lease agreement over each site.
If implemented, the proposed IPO is expected to realise “significant” value for Caltex shareholders, while allowing Caltex to maintain operational control of the company’s core convenience retail network.
It is anticipated that the property trust will receive rental payments from Caltex of approximately $80 million to $100 million in the first year.
The proposed IPO, says Caltex, represents a further milestone from the ongoing retail network review and builds on the outcomes announced at half year results in August.
As announced, Caltex will focus on delivering growth from an enhanced convenience offer on approximately 500 core sites and is progressing the divestment of 50 metropolitan freehold sites identified as having a higher value through alternative use.
The 250 sites to be part of the proposed property IPO represent all the freehold sites within the identified core network of 500 sites.
Implementation of the proposed IPO is subject to obtaining various approvals, consents and waivers from third parties. This includes the ASX, in addition to final Caltex board approval.
It is also subject to prevailing market conditions. If approved, the transaction is expected to complete in the first half of 2020.
