Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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<p>Back on the 23 August, Kiwi fuel distributor <a href="https://www.smartkarma.com/entities/z-energy-ltd" target="_blank" data-smartkarma-citation="entities:9838:1" rel="noopener">Z Energy Ltd (ZEL NZ)</a> announced it had <a href="http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ZEL/377730/352778.pdf" target="_blank" rel="noopener">received</a> a non-binding indicative acquisition proposal from <a href="https://www.smartkarma.com/entities/ampol-ltd" target="_blank" data-smartkarma-citation="entities:345:1" rel="noopener">Ampol (ALD AU)</a>. The Offer of NZ$3.78/share, by way of a Scheme, was a 22% premium to the last closing price, although in Ampol's separate <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02410030_PS-2A1317126?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announcement</a>, the Offer price was a 35% premium to the last close on the 26 July, the day prior to the first press <a href="https://businessdesk.co.nz/article/markets/z-shy-over-takeover-talk-as-it-promises-to-do-better-again" target="_blank" rel="noopener">speculation</a> of corporate activity. </p>
<p>Ampol was granted four weeks of exclusive due diligence. On the 27 September, the DD was <a href="https://www.nzx.com/announcements/379821" target="_blank" rel="noopener">extended</a> by a further two weeks. There were rumours in the local press, such as the New Zealand Sun, that Ampol may up its bid to NZ$4/share.</p>
<h3>The New News</h3>
<p>ZEL and Ampol have now <a href="http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ZEL/380676/356623.pdf" target="_blank" rel="noopener">announced</a> a binding Scheme of Arrangement under which ZEL shareholders would receive $3.78/share plus NZ$0.05/share in dividends - or NZ$3.83/share all-in. ZEL shareholders will also be entitled to a further NZ$0.10/share in dividends if the takeover is not completed by the end of March.</p>
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<p>The proposal remains subject to approvals from ZEL's shareholders, and both the New Zealand <a href="https://comcom.govt.nz/" target="_blank" rel="noopener">Commerce Commission</a> and the New Zealand Overseas Investment Office. It is also conditional on the transition of the Marsden Point fuel refinery to an import-only terminal.</p>
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<p>Ampol has committed to a full divestment of its Gull service stations in New Zealand to address potential competition issues.</p>
<p>This looks done. OIO approval will likely be the biggest sticking point, although Ampol is already in the good books after receiving OIO approval back in 2017 in its acquisition of Gull.</p>
<p>The shareholder meeting to vote on the Scheme is expected to be held early in 2022 with the transaction expected to be wrapped up in the 1H22. </p>
<p></p>
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Back on the 23 August, Kiwi fuel distributor Z Energy Ltd (ZEL NZ) announced it had received a non-binding indicative acquisition proposal from Ampol (ALD AU). The Offer of NZ$3.78/share, by way of a Scheme, was a 22% premium to the last closing price, although in Ampol's separate announcement, the Offer price was a 35% premium to the last close on the 26 July, the day prior to the first press speculation of corporate activity. 
Ampol was granted four weeks of exclusive due diligence. On the 27 September, the DD was extended by a further two weeks. There were rumours in the local press, such as the New Zealand Sun, that Ampol may up its bid to NZ$4/share.
The New News
ZEL and Ampol have now announced a binding Scheme of Arrangement under which ZEL shareholders would receive $3.78/share plus NZ$0.05/share in dividends - or NZ$3.83/share all-in. ZEL shareholders will also be entitled to a further NZ$0.10/share in dividends if the takeover is not completed by the end of March.


The proposal remains subject to approvals from ZEL's shareholders, and both the New Zealand Commerce Commission and the New Zealand Overseas Investment Office. It is also conditional on the transition of the Marsden Point fuel refinery to an import-only terminal.


Ampol has committed to a full divestment of its Gull service stations in New Zealand to address potential competition issues.
This looks done. OIO approval will likely be the biggest sticking point, although Ampol is already in the good books after receiving OIO approval back in 2017 in its acquisition of Gull.
The shareholder meeting to vote on the Scheme is expected to be held early in 2022 with the transaction expected to be wrapped up in the 1H22. 



Z Energy (ZEL NZ) Enters Into Scheme With Ampol

Last Week in Event SPACE: Sembcorp, CK Hutch, Prosus/Naspers, Z Energy, Milton, China Logistics

Beijing Capital Land Ltd H / Event-Driven

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<p>This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.</p>
<p>I number 36, mostly firm, deals around the region.</p>
<p>More below the fold.</p>
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This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.
I number 36, mostly firm, deals around the region.
More below the fold.


Asia-Pac Weekly Risk Arb Summary: Beijing Capital Land, Suchuang Gas, Siam Dev, 1300Smiles

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<p><a href="https://www.smartkarma.com/entities/z-energy-ltd" target="_blank" data-smartkarma-citation="entities:9838:1" rel="noopener">Z Energy Ltd (ZEL NZ)</a> is a fuel distribution and retailing business which owns and manages over 300 fuel stations in New Zealand under the Z and Caltex brands. Z Energy revealed a non-binding indicative proposal from <a href="https://www.smartkarma.com/entities/ampol-ltd" target="_blank" data-smartkarma-citation="entities:345:1" rel="noopener">Caltex Australia (ALD AU)</a>/Ampol to acquire it via a scheme of arrangement. Ampol is offering NZ$3.78 per share. The bid represents a 22% premium to the share price on 12 August (prior to receipt of the announced proposal), a 35% premium to the share price on 26 July (prior to media speculation regarding a bid) and a 47% premium to the share price on 1 June (prior to Ampol’s first rejected proposal).</p><p>Z Energy has agreed to grant Ampol a four-week exclusivity period to conduct due diligence. The indicative offer permits Z Energy to pay dividends up to NZ 10 cents on the scheme implementation to accommodate any regulatory-driven delays. Subject to discussions, Ampol’s offer may include a scrip component and a secondary New Zealand listing.  </p><p>Pushing for a better price is part of the M&amp;A game. The Board had rejected Ampol’s previous three offers as they did not represent compelling value. The Board was able to secure a sweetened bid which offers a 12.8% bump to Ampol’s first offer of NZ$3.35 per share.  </p><p>Ampol’s offer is a premium to Z Energy's historical EV/EBITDA multiples but a discount to pre-COVID-19 share prices. Z Energy’s CEO opines that Ampol’s bid could be a catalyst for other bidders that had previously signalled interest to make a move for Z Energy. Potential bidders could be <a href="https://www.smartkarma.com/entities/chevron-corp" target="_blank" data-smartkarma-citation="entities:11091:1" rel="noopener">Chevron Corp (CVX US)</a>, Vitol, <a href="https://www.smartkarma.com/entities/glencore-plc" target="_blank" data-smartkarma-citation="entities:764:1" rel="noopener">Glencore Plc (GLEN LN)</a>, Trafigura and Japanese refiners.</p><div class="content-highlight"><p>Overall, we think Ampol’s offer is a good starting point to lay down a valuation benchmark and suspect that there is some upside to the final offer price. At the last close price of NZ$3.48, Z Energy’s shares are trading at an 8.6% gross spread to the indicative offer.</p></div>

Z Energy Ltd (ZEL NZ) is a fuel distribution and retailing business which owns and manages over 300 fuel stations in New Zealand under the Z and Caltex brands. Z Energy revealed a non-binding indicative proposal from Caltex Australia (ALD AU)/Ampol to acquire it via a scheme of arrangement. Ampol is offering NZ$3.78 per share. The bid represents a 22% premium to the share price on 12 August (prior to receipt of the announced proposal), a 35% premium to the share price on 26 July (prior to media speculation regarding a bid) and a 47% premium to the share price on 1 June (prior to Ampol’s first rejected proposal).Z Energy has agreed to grant Ampol a four-week exclusivity period to conduct due diligence. The indicative offer permits Z Energy to pay dividends up to NZ 10 cents on the scheme implementation to accommodate any regulatory-driven delays. Subject to discussions, Ampol’s offer may include a scrip component and a secondary New Zealand listing.  Pushing for a better price is part of the M&amp;A game. The Board had rejected Ampol’s previous three offers as they did not represent compelling value. The Board was able to secure a sweetened bid which offers a 12.8% bump to Ampol’s first offer of NZ$3.35 per share.  Ampol’s offer is a premium to Z Energy's historical EV/EBITDA multiples but a discount to pre-COVID-19 share prices. Z Energy’s CEO opines that Ampol’s bid could be a catalyst for other bidders that had previously signalled interest to make a move for Z Energy. Potential bidders could be Chevron Corp (CVX US), Vitol, Glencore Plc (GLEN LN), Trafigura and Japanese refiners.Overall, we think Ampol’s offer is a good starting point to lay down a valuation benchmark and suspect that there is some upside to the final offer price. At the last close price of NZ$3.48, Z Energy’s shares are trading at an 8.6% gross spread to the indicative offer.

<p>Kiwi fuel distributor <a href="https://www.smartkarma.com/entities/z-energy-ltd" target="_blank" data-smartkarma-citation="entities:9838:1" rel="noopener">Z Energy Ltd (ZEL NZ)</a> has announced it has <a href="http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ZEL/377730/352778.pdf" target="_blank" rel="noopener">received</a> a non-binding indicative acquisition proposal from <a href="https://www.smartkarma.com/entities/ampol-ltd" target="_blank" data-smartkarma-citation="entities:345:1" rel="noopener">Ampol (ALD AU)</a>.</p>
<p>The Offer of NZ$3.78/share, by way of a Scheme, is a 22% premium to the last closing price. According to the announcement, negotiations started at NZ$3.35/share.</p>
<p>As per Ampol's separate <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02410030_PS-2A1317126?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announcement</a>, the Offer price is a 35% premium to the last close on the 26 July, the day prior to the first press speculation of corporate activity. </p>
<p>The proposal requires a raft of approvals including ZEL's shareholder's approval, and both the New Zealand <a href="https://comcom.govt.nz/" target="_blank" rel="noopener">Commerce Commission</a> and the New Zealand Overseas Investment Office.</p>
<p>Ampol is committed to divesting discount retailer Gull if need be to gain necessary regulatory approvals.</p>
<p>Dividends up to a limit of NZ$0.10/share may be payable depending on when all approvals are secured. </p>
<p>ZEL is currently not recommending the Offer to shareholders. However:</p>
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<p>this Proposal is subject to further development and evaluation by both parties, the Board supports a period of exclusive engagement with the objective of developing a transaction that would be acceptable to the Board and shareholders. </p>
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<p>More below the fold.</p>

Kiwi fuel distributor Z Energy Ltd (ZEL NZ) has announced it has received a non-binding indicative acquisition proposal from Ampol (ALD AU).
The Offer of NZ$3.78/share, by way of a Scheme, is a 22% premium to the last closing price. According to the announcement, negotiations started at NZ$3.35/share.
As per Ampol's separate announcement, the Offer price is a 35% premium to the last close on the 26 July, the day prior to the first press speculation of corporate activity. 
The proposal requires a raft of approvals including ZEL's shareholder's approval, and both the New Zealand Commerce Commission and the New Zealand Overseas Investment Office.
Ampol is committed to divesting discount retailer Gull if need be to gain necessary regulatory approvals.
Dividends up to a limit of NZ$0.10/share may be payable depending on when all approvals are secured. 
ZEL is currently not recommending the Offer to shareholders. However:

this Proposal is subject to further development and evaluation by both parties, the Board supports a period of exclusive engagement with the objective of developing a transaction that would be acceptable to the Board and shareholders. 

More below the fold.

Z Energy (ZEL NZ) Tentatively Backs Ampol's Approach

Australia

Ampol Limited provides petroleum products. The Company offers petrol and convenience network as well as refining, importing, and marketing fuels and lubricants. Ampol serves defence, mining, transport, marine, agriculture, aviation, and other commercial sectors in Australia.

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Ampol (ALD AU)

Z Energy (ZEL NZ) Enters Into Scheme With Ampol

Currently trading at a gross/annulised return of 5.35/9.4%, assuming early May completion. Not bad, but as this is likely a long-dated deal, I...

David Blennerhassett

Last Week in Event SPACE: Sembcorp, CK Hutch, Prosus/Naspers, Z Energy, Milton, China Logistics

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Asia-Pac Weekly Risk Arb Summary: Beijing Capital Land, Suchuang Gas, Siam Dev, 1300Smiles

This insight provides a quick summary of gross/annualised (where possible) spreads on 36 (mostly) firm deals as at the last trading date, and how...

David Blennerhassett

Ampol Lobs an Offer for Z Energy

Z Energy revealed a non-binding indicative proposal from Ampol at NZ$3.78 per share. We suspect that there is some upside to the final offer price....

Arun George

Z Energy (ZEL NZ) Tentatively Backs Ampol's Approach

The Offer still looks light, most noticeably when compared to pre-Covid levels. It is ZEL's intention to grant DD to flesh out a bump. Ampol is...

David Blennerhassett

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