The Caltex Australia Limited (ASX: CTX) share price is on watch today after the company announced it is not going to proceed with the takeover proposal from EG Group.
Details of today's announcement
This morning, Caltex announced to the market it has decided not to go ahead with the proposed takeover from EG Group which was previously announced on 19 February. Caltex didn't believe that the offer had sufficient value for its shareholders.
Caltex commented that its board had carefully considered the EG proposal, which included taking into account the associated risks, costs and complexities. In addition, Caltex had sought legal advice and also carefully considered feedback from its shareholders.
Caltex noted that it will continue to further engage with EG Group with regards to a potential sale. However, Caltex did add there was no certainty that any discussions between the two parties would lead to a binding proposal.
Details of the previous takeover bid by EG Group
Back of 19 February, Caltex received a proposal from EG Group Limited to acquire all of the shares in Caltex via a scheme of arrangement. This was to consist of a combination of $3.9 billion cash and securities to be issued in a new ASX-listed entity to be named Ampol. This new entity was to own the remaining assets of Caltex, including the existing fuel and infrastructure business as well as international trading and shipping operations.
If implemented, EG Group would have acquired 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. Caltex shareholders would receive approximately $15.62 cash and a security in Ampol for each Caltex share they hold.
Prior takeover bid
Back on 13 February 2020, Caltex received a revised proposal from Alimentation Couche-Tard to acquire all of the shares in Caltex by way of a scheme of arrangement. The proposed indicative cash price was $35.25 per share, less any dividends declared or paid by Caltex.
