Caltex says Canadian giant’s $8.6 billion takeover offer ‘undervalues’ company

“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,” board chairman Steven Gregg said.

Caltex was forced to disclose Couche-Tard’s offer to the ASX last Tuesday after news of the potential deal became public.

The Quebec-based company operates 16,000 stores across Canada, the United States, Europe, Mexico, Japan, China and Indonesia. Its Circle K brand is well known throughout Asia.

Couche-Tard’s non-binding offer would see it buy all of Caltex’s shares at an indicative cash price of $34.50 cash per share less any dividends paid by Caltex.

It was the second offer Caltex had received from Couche-Tard after it rejected an earlier offer from its suitor of $32 per share made on October 11.

Caltex’s board pointed to a “range of considerations” behind its conclusion the offer was inadequate.


The petrol and convenience retailer was at a low point in its earnings and its recently proposed initial public offering to offload a half-stake in its 250 service stations around Australia into a $1.1 billion listed property trust would unlock greater value for shareholders, it said.

Caltex has suffered from lower refiner margins and a difficult retail environment with subdued demand from sectors such as agriculture, transport and construction.

In a trading update last month, it said it expected earnings before interest and tax from its petrol stations to be between $190 million and $210 million – an improvement from its first-half earnings but vastly lower than the previous year’s profit result of $307 million.


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