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  • Caltex Australia (CTX) has announced the Board is unsatisfied with Alimentation Couche-Tard’s proposal to acquire all of the company’s shares
  • Last month, the Canadian convenience store chain proposed to acquire all of Caltex’s shares at a cash price of $34.50 per share
  • But it seems the proposal simply wasn’t compelling enough following careful consideration with financial and legal advisers as well as Caltex shareholders
  • Despite the conclusion, the Caltex Board has offered to give ATD selected non-public information so it can revise its proposal
  • Caltex is down slightly by 0.75 per cent and shares are trading for $34.50 each

Caltex Australia (CTX) has announced the Board is underwhelmed and unsatisfied with Alimentation Couche-Tard’s proposal to acquire all of the petroleum brand’s shares.

On November 26, Canadian convenience store Alimentation Couche-Tard (ATD), proposed to acquire all of the shares in Caltex through a scheme of arrangement at a cash price of $34.50 per share.

Reportedly, the proposal was ATD’s second proposal as it previously offered an uncompelling buyout offer of $32 per share.

Despite the conclusion, the Caltex Board has offered to give ATD selected non-public information so it can revise its proposal.

Caltex came to its decision following advice from financial, legal and tax advisers, as well as its shareholders.

“The Caltex Board is focused on maximising shareholder value and will carefully consider any proposal that is consistent with this objective,” Caltex Chairman Steven Gregg said.

The fuel giant also considered the value of its assets, the fact its currently at a low point in earnings, significant opportunities available for the convenience retail business and the proposed IPO of up to 49 per cent interest in 250 core convenience retail sites which the Board expects will unlock value and cash for shareholders.

The proposal was evaluated on the basis that the price would be reduced by the value of the dividend that the company would be likely to pay for the second half of 2019 in accordance with Caltex’s dividend policy.

The Board also assessed the cash benefit to Caltex’s shareholders that could potentially be realised by distributing franking credits along with ATD’s proposal.

It found the examples ATD provided materially overstates the potential cash benefit to nearly all shareholders.

“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,” Steven said.

Caltex is down slightly by 0.75 per cent and shares are trading for $34.50 each at 12:33 pm AEDT.

CTX by the numbers
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