The Caltex Australia Limited (ASX: CTX) share price is trading slightly higher today after news of a takeover bid by UK-based EG Group hit the ASX.
EG Group is a British retailer based in Blackburn, Lancashire which operates petrol stations and fast food outlets in Europe, the United States and Australia. The group was created through the combination of Euro Garages and EFR Group back in 2016.
Details of the new takeover bid
This morning, Caltex confirmed it has received a non-binding, indicative and conditional proposal from EG Group Limited to acquire all of the shares in Caltex via a scheme of arrangement.
This scheme arrangement will consist of a combination of $3.9 billion cash and securities to be issued in an entity to be listed on the ASX, which will be named Ampol. This new entity will own the remaining assets of Caltex, including the existing fuel and infrastructure business, as well as international trading and shipping operations.
If implemented, the effect of this proposal would be for EG to acquire Caltex's convenience retail business for $3.9 billion in cash. This would be done on a cash and debt-free basis with a normal level of working capital. In addition, Caltex shareholders would receive approximately $15.62 cash and a security in Ampol for each Caltex share they hold.
This takeover proposal enables Caltex to be able to continue paying dividends to its shareholders in the ordinary course of business prior to implementation of the takeover transaction.
The takeover proposal also provides for Caltex to be able to pay a fully-franked special dividend to Caltex shareholders to distribute the balance of the company's franking credits. This special dividend would be funded by using Caltex's balance sheet.
EG has indicated to Caltex it is also prepared to consider acquiring up to 10% of Ampol for additional cash consideration.
Caltex pointed out that the proposal is subject to a number of conditions which include due diligence and arranging debt financing for the transaction.
The Caltex Board stated that it is currently considering the proposal, including obtaining advice from its financial and legal advisers.
Prior takeover announcement
The announcement today comes on the back of an announcement made to the ASX on 13 February 2020. In this release, Caltex advised it had received a revised proposal from Alimentation Couche-Tard (ATD) to acquire all of the shares in Caltex by way of a scheme of arrangement.
This was followed up by a further announcement on February 17, 2020 that Caltex had decided to provide ATD with the opportunity to conduct additional due diligence on a non-exclusive basis.
