January 15, 2020 / 10:02 PM / 5 days ago

Caltex Australia inks confidentiality deal with Couche-Tard, hopes for higher offer

(Reuters) - Takeover target Caltex Australia (CTX.AX) has signed a confidentiality agreement with Alimentation Couche-Tard (ATDb.TO) that gives the Canadian firm access to select non-public information in the hope that it will raise its offer.

The agreement announced on Thursday comes as interest in the Australian petrol pump and convenience store operator is building from a number of parties, including UK-based EG Group.

Caltex rejected a A$8.6 billion ($5.9 billion), or A$34.50 per share, offer in November from convenience store operator Couche-Tard, saying it undervalued the company.

The Australian company has said it was willing to work with Couche-Tard on a higher offer, but noted on Thursday that there was no certainty the discussions would lead to an improvement in price or a binding proposal.

Couche-Tard Chief Executive Officer Brian Hannasch said the current offer “fully values Caltex and is compelling for Caltex shareholders”.

While the Laval-based company was a disciplined investor, it would “always be guided by shareholder returns”, he said in an emailed statement to Reuters.

Caltex shares were up 0.3% at A$35.65 in early trade, comfortably higher than the last offer price.

The heightened interest in Caltex comes after the surprise re-entry of former co-owner Chevron Corp (CVX.N) into Australian petrol retailing, when it picked up Puma Energy’s business for A$425 million and exercised its right to the Caltex name.

Caltex has said it will spend A$165 million to rebrand its petrol stations to its old Ampol name.

EG Group, backed by private equity firm TDR Capital, entered Australia in 2018 when it bought supermarket giant Woolworths Group’s (WOW.AX) petrol stations for A$1.7 billion.

Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Stephen Coates

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