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Mergers & Acquisitions

Caltex Australia Rejects Couche-Tard’s Bid

Says $5.8 billion offer ‘undervalues’ company
caltex canopy

SYDNEY — Caltex Australia Ltd. has rejected an “unsolicited, conditional, confidential, nonbinding and indicative” bid Alimentation Couche-Tard Inc. made in late November to acquire the Australian fuel supplier and convenience-store retailer for $5.8 billion.

Couche-Tard's $34.50-per-share bid is for 100% of Caltex Australia, reflecting an enterprise value of approximately $10 billion in Australian dollars, or $5.8 billion U.S.

Caltex’s board of directors has concluded that Couche-Tard’s proposal “undervalues the company and does not represent compelling value for Caltex’s shareholders,” the company said. The board, however, has offered to provide Couche-Tard with selected nonpublic information to allow it to formulate a revised proposal. 

The Caltex board considered the proposal and obtained advice from its financial, legal and tax advisers, as well as feedback from its shareholders.

The board considered the strategic value of Caltex’s assets; its view that Caltex is currently at a low point in its earnings; the consistent performance of the fuels and infrastructure business and its international growth trajectory; the significant opportunities available for the convenience-retail business; and other initiatives. It also considered an initial public offering (IPO) in 250 core c-store sites that the company announced on Nov. 25 that the board expects will unlock value and release cash for shareholders.

There is no certainty that the discussions between Caltex and Couche-Tard will result in a revised proposal from Couche-Tard, Caltex said. 

“Caltex has a well-developed strategy, privileged assets, strong leadership and compelling growth opportunities that the board believes will deliver attractive value for its shareholders over time,” said Chairman Steven Gregg. “We look forward to sharing further details on the execution of our strategic plan at our Investor Day on Dec 5. The Caltex board is focused on maximizing shareholder value and will carefully consider any proposal that is consistent with this objective.”

There is no certainty that the discussions between Caltex and Couche-Tard will result in a revised proposal from Couche-Tard, Caltex said. 

Sydney-based Caltex operates as a refiner, importer and marketer of fuels and lubricants. It has a network of approximately 2,000 company-owned or affiliated retail sites.

  • Couche-Tard is No. 2 in CSP's 2019 Top 202 ranking of U.S. c-store chains by number of company-owned retail outlets.

Laval, Quebec-based Couche-Tard’s retail network includes 9,815 c-stores in North America covering 48 U.S. states under the Circle K and Holiday Stationstores banners and all 10 Canadian provinces under the Circle K and Couche-Tard banners. In Europe, it operates a broad retail network across Scandinavia, Ireland, Poland, the Baltics and Russia that includes 2,708 stores under several banners, mostly Circle K. In addition, licensees operate approximately 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 the worldwide total network to more than 14,800 stores.

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