Caltex says $8.6bn bid undervalues business but open to revised offer

Fuel retailer Caltex Australia has responded to a $8.6 billion takeover bid from Canadian convenience operator, Alimentation Couche-Tard (ATD), saying it undervalues the business.

On the guidance of financial, legal and tax advisers and feedback from shareholders on the unsolicited, non-binding proposal put forward by ATD last week, the Caltex board determined that the offer “does not represent compelling value” for shareholders, given factors such as future earnings potential, international growth, and the proposed IPO of up to 49 per cent of 250 retail sites.

The retailer is, however, leaving the door open for another bid by offering non-public information to the Canadian company to inform a revised proposal.

The provision of such information is conditional on both parties entering into an appropriate confidentiality agreement.

Even if discussions do go ahead, the retailer said there is “no certainty” that it will result in a revised proposal from ATD.

“Caltex has a well-developed strategy, privileged assets, strong leadership and compelling growth opportunities that the Board believes will deliver attractive value for its shareholders over time,” Caltex chairman Steven Gregg said.

“The Caltex Board is focused on maximising shareholder value and will carefully consider any proposal that is
consistent with this objective.”

The retailer will share more details on the execution of its strategic plan at its Investor Day this Thursday, December 5.

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