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Mergers & Acquisitions

Alimentation Couche-Tard Raises Bid for Caltex Australia

EG Group reportedly teaming up with Macquarie Group for possible rival offer

LAVAL, Quebec — Global convenience-store retailer Alimentation Couche-Tard Inc. confirmed that it has raised its bid to acquire 100% of Caltex Australia Ltd. to $5.93 billion, or $23.72 per share. Meanwhile, rival EG Group is reportedly also preparing a bid for Caltex Australia, and it may partner with an investment bank to split up the assets. Both companies compete on the global and U.S. stages.

If Couche-Tard purchases Caltex Australia, it would be the Laval, Quebec-based company’s biggest acquisition ever.

In November, Couche-Tard entered an unsolicited bid of $5.8 billion to buy Caltex Australia, one of the nation’s leading transportation fuel suppliers, with a network of about 1,900 company-owned or -affiliated sites, including more than 500 Star Mart convenience stores.

Sydney-based Caltex Australia rejected the bid, saying it “undervalues the company and does not represent compelling value for Caltex’s shareholders.” But the board provided Couche-Tard with selected nonpublic information to allow it to formulate a revised proposal. 

The revised price under the new proposal represents Couche-Tard's best and final offer, in the absence of a competing proposal, the company said. A transaction requires approval by both boards and the Australia's Foreign Investment Review Board.

“We believe this further revised proposal takes into consideration the information provided throughout our engagement to date and represents a compelling premium for Caltex shareholders, as well as immediate certainty of value,” said Brian Hannasch, president and CEO of Couche-Tard. “We have long viewed the Asia-Pacific region as strategic to Couche-Tard's future growth, and we look forward to our continued engagement with the Caltex board in progressing this further revised proposal. We remain a committed buyer of the entire Caltex business, where we see a potential opportunity to leverage our deep operating expertise and global insights to support and grow the Caltex business.”

Blackburn, U.K.-based EG Group is also considering a bid for Caltex Australia, Bloomberg reported in early January. The company, with about 5,400 sites in Europe, the United States and Australia, is now in talks with Macquarie Group Ltd. for the London-based investment bank to acquire Caltex Australia’s refinery and midstream assets while EG Group would acquire the retail network, according to the news agency.

Couche-Tard’s network includes more than 9,800 c-stores in North America in 48 U.S. states, mostly under the Circle K and Holiday Stationstores banners, and all 10 provinces in Canada, under the Circle K and Couche-Tard banners. In Europe, Couche-Tard operates a retail network in Scandinavia, Ireland, Poland, the Baltics and Russia with more than 2,700 stores. Also, licensees operate about 2,280 stores under the Circle K banner in 16 other countries and territories (Cambodia, China, Costa Rica, Egypt, Guam, Honduras, Hong Kong, Indonesia, Jamaica, Macau, Mexico, Mongolia, New Zealand, Saudi Arabia, the United Arab Emirates and Vietnam), which brings its worldwide total network to more than 14,800 stores.

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