Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: ARA Logos/ESR-REIT, Z Energy, Ausnutria, MatsukiyoCocokara

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 is the market leader in New Zealand and sells 40% of all fuel volumes across New Zealand. </p><p>Z Energy entered into a binding scheme implementation agreement with <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. Ampol will offer NZ$3.78 per share, which is unchanged from Ampol’s non-binding indicative proposal revealed on 23 August. Ampol has sweetened its bid by also allowing Z Energy to pay a NZ$0.05 per share interim FY22 dividend. Consistent with the previous proposal, the offer continues to include an adjustment mechanism to pay NZ0.055 cents per share per day for each day the transaction extends beyond 31 March 2022, up to a limit of NZ10 cents per share.</p><p>The total offer price of NZ$3.83 per share represents a 24% premium to the share price on 12 August (prior to receipt of the proposal), a 37% premium to the share price on 26 July (prior to media speculation regarding a bid) and a 48% premium to the share price on 1 June (prior to Ampol’s first rejected proposal).</p><p>The key conditions are Z Energy shareholder approval and regulatory approvals from the New Zealand Commerce Commission (NZCC) and New Zealand Overseas Investment Office (OIO). Ampol is committed to the full divestment of Gull (trade sale or IPO) to secure NZCC approval. Ampol has agreed a set of commitments with Z Energy to help it secure OIO approval. Deal completion is targeted for 1H22. </p><div class="content-highlight"><p>As highlighted in <a href="https://www.smartkarma.com/insights/ampol-lobs-an-offer-for-z-energy" target="_blank" data-smartkarma-citation="insights:56534" rel="noopener">Ampol Lobs an Offer for Z Energy</a>, the Board had rejected Ampol’s previous three offers as they did not represent compelling value. Ampol’s total final offer price of NZ$3.83 is a premium to historical EV/EBITDA multiples and post-COVID-19 share prices. Overall, we think Ampol’s final offer will succeed. At the last close price of NZ$3.61, Z Energy’s shares are trading at a 6.1% gross spread to the total offer price.</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 is the market leader in New Zealand and sells 40% of all fuel volumes across New Zealand. Z Energy entered into a binding scheme implementation agreement with Caltex Australia (ALD AU)/Ampol. Ampol will offer NZ$3.78 per share, which is unchanged from Ampol’s non-binding indicative proposal revealed on 23 August. Ampol has sweetened its bid by also allowing Z Energy to pay a NZ$0.05 per share interim FY22 dividend. Consistent with the previous proposal, the offer continues to include an adjustment mechanism to pay NZ0.055 cents per share per day for each day the transaction extends beyond 31 March 2022, up to a limit of NZ10 cents per share.The total offer price of NZ$3.83 per share represents a 24% premium to the share price on 12 August (prior to receipt of the proposal), a 37% premium to the share price on 26 July (prior to media speculation regarding a bid) and a 48% premium to the share price on 1 June (prior to Ampol’s first rejected proposal).The key conditions are Z Energy shareholder approval and regulatory approvals from the New Zealand Commerce Commission (NZCC) and New Zealand Overseas Investment Office (OIO). Ampol is committed to the full divestment of Gull (trade sale or IPO) to secure NZCC approval. Ampol has agreed a set of commitments with Z Energy to help it secure OIO approval. Deal completion is targeted for 1H22. As highlighted in Ampol Lobs an Offer for Z Energy, the Board had rejected Ampol’s previous three offers as they did not represent compelling value. Ampol’s total final offer price of NZ$3.83 is a premium to historical EV/EBITDA multiples and post-COVID-19 share prices. Overall, we think Ampol’s final offer will succeed. At the last close price of NZ$3.61, Z Energy’s shares are trading at a 6.1% gross spread to the total offer price.

Ampol Enters a Binding SIA to Acquire Z Energy

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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

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)

Last Week in Event SPACE: ARA Logos/ESR-REIT, Z Energy, Ausnutria, MatsukiyoCocokara

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

Ampol Enters a Binding SIA to Acquire Z Energy

Ampol’s total offer price of NZ$3.83 is a premium to EV/EBITDA multiples and post-COVID-19 share prices. Deal close in 1H22. Shares are trading at...

Arun George

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

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