Caltex Says Couche-Tard's Proposal Undervalues Company

LAVAL, Quebec — Caltex Australia Ltd. is not ready to make a deal with Alimentation Couche-Tard Inc.

On Dec. 3, Caltex said its board of directors concluded that Couche-Tard's proposal undervalues the company and does not represent compelling value for Caltex's shareholders.

However, the board offered to provide Couche-Tard with selected non-public information to allow it to formulate a revised proposal.

Caltex is a transport fuel supplier, with a network of approximately 2,000 company-owned or affiliated sites across Australia. Laval-based Couche-Tard is the parent company global retail brand Circle K.

The board's response came to Couche-Tard's "unsolicited, conditional, confidential, non-binding and indicative proposal" to acquire all Caltex shares at A$34.50.

Couche-Tard made the first acquisition proposal on Oct. 11, and the second came on Nov. 18, as Convenience Store News previously reported.

According to Caltex, the board obtained advice from its financial, legal and tax advisers, and considered shareholder feedback when considering the proposal.

Among the board's considerations were:

• 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
• The proposed initial public offering of up to a 49-percent interest in 250 core convenience retail sites, as announced Nov. 25.