The Caltex Australia Limited (ASX: CTX) share price could be on the rise on Tuesday amid speculation that a bidding war for the fuel retailer could be brewing.
What is happening?
On November 26 Caltex revealed that it had received an unsolicited, conditional, confidential, non-binding and indicative proposal from Canada's Alimentation Couche-Tard.
Alimentation Couche-Tard offered to acquire Caltex by way of scheme of arrangement at an indicative cash price of $34.50 per share less any dividends. This valued Caltex at ~$8.6 billion.
Approximately a week later the Caltex board revealed that it believed the proposal undervalued the company and did not represent compelling value for shareholders. As a result, it rejected the proposal.
According to Bloomberg, sources have revealed that another suitor is interested in acquiring the fuel retailer.
The report advises that UK-based EG Group, the world's largest independent fuel station and convenience store chains, is considering a bid for fuel retailer.
EG Group is understood to be working with a financial adviser as it looks into making an offer for Caltex.
What is EG Group?
UK-based EG Group was formed in 2016 when Euro Garages merged with TDR's European Forecourt Retail Group.
It owns and operates a diversified portfolio of sites across Europe, North America and Australia, employing over 28,500 staff through ~4,700 sites.
It has been on a buying spree in recent years as it aims to expand its reach globally. In November 2018 it agreed to pay $1.7 billion to acquire 540 Australian fuel convenience sites from Woolworths Group Ltd (ASX: WOW).
In the same year it paid US$2.15 billion to acquire US supermarket giant Kroger's US convenience store business. And in July of last year it bought 600 locations owned by US-based Cumberland Farms. The latter deal made it the fifth-largest independent convenience store operator in the United States.
The company is rumoured to be planning an IPO, which could provide it with some of the funds required to launch a takeover of Caltex.
