The Z Energy Ltd (ASX: ZEL) share price is soaring after the company received an acquisition offer from Ampol Ltd (ASX: ALD).
According to Z Energy, Ampol has proposed to pay $3.62 (converted from New Zealand dollars at the current exchange rate) for each share in Z Energy, valuing the business at $1.88 billion.
Right now, the Z Energy share price is $3.32, 14.88% higher than its previous close. However, earlier today, the Z Energy share price reached $3.40 – a new 52-week high and 17.6% higher than Friday's close.
Let's take a closer look at today's news from the New Zealand-based business-to-business fuel supplier.
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Acquisition proposal
Z Energy's shares are gaining on the back of a new acquisition offer.
According to the company, Ampol's offer of $3.62 per share represents a 22% premium on Z Energy's shares' closing price on 12 August and a 26% premium on their 30-day volume-weighted average price.
Ampol's bid is said to be the fourth the company has made for Z Energy. Initially, it offered Z Energy $3.21 per share.
Z Energy's board had previously determined Ampol's bid hadn't sufficiently valued Z Energy. However, Ampol's $3.62 bid will pass to a four-week period of exclusivity, within which Ampol will properly develop its proposal.
In discussing the acquisition, Z Energy and Ampol are said to be considering including a partial Ampol share consideration or a secondary listing of Ampol on the New Zealand Stock Exchange.
Additionally, because the bid involves regulatory approvals, if agreed to, it would restrict the payment of dividends. To accommodate delays, Ampol proposed Z Energy pay its shareholders a 5.3-cent dividend per calendar day beyond 31 March 2022 in which the scheme has not financially closed. Though, the dividends will be capped at NZ 9.8-cents per share.
While Z Energy's shares have been boosted by the potential acquisition, those of Ampol are floundering.
Right now, Ampol's shares are trading for 4.49% less than they were at Friday's close.
Ampol announced the acquisition proposal alongside its half-year results this morning.
Z Energy share price snapshot
Including today's boost, the Z Energy's shares have gained 11.8% year to date. They are also 33% higher than they were this time last year.
At its current share price, Z Energy has a market capitalisation of around $1.72 billion. It has approximately 520 million shares outstanding.
