Caltex Australia has received an improved $5.8 billion takeover bid from from Alimentation Couche-Tard Inc. (ACT), the company has confirmed. 

Caltex confirmed in a statement to the ASX that ACT had made a conditional, non-binding $34.50-a-share bid, a 23 per cent premium above the share price over the past month. The proposal would permit Caltex to pay a special dividend or other distribution. It followed an earlier approach from ACT at an indicative cash price of A$32.00 per share, which was rejected.

The company operates Australia’s third-largest refinery at Lytton in Brisbane which produces around 6.5 billion litres of fuel a year — or around 25 per cent of refining capacity and 10 per cent of total fuel consumption.

The proposal is subject to a number of conditions, including due diligence, organising necessary financing for the transaction, no material asset sales, divestments or similar transactions, obtaining Foreign Investment Review Board approval, a unanimous recommendation by the Caltex Board and the approval of the ACT Board.

The announcement follows Caltex’s announcement on November 25 of its intention to undertake an IPO of up to a 49 per cent interest in 250 core Convenience Retail freehold sites. The announcement of Caltex’s intention to undertake an IPO follows significant work Caltex has undertaken over the last 18 months to release value to its shareholders from its property portfolio and builds upon the network review announced in August. The company’s announcement about the IPO is not related to the proposal.

“The discussions between Caltex and ACT are at a preliminary stage, the proposal is highly conditional and there is no certainty that these discussions will result in a transaction,” the company said.

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27th November 2019