The Caltex Australia Limited (ASX: CTX) share price will be on watch this morning following the release of two separate market announcements.
One is regarding an update on the proposed takeover by Canadian fuel retailer Alimentation Couche-Tard, while the other is an update on Caltex's refiner margins for January.
Acquisition update by Alimentation Couche-Tard
Caltex confirmed this morning that it had received a revised, conditional, nonbinding and indicative proposal from Alimentation Couche-Tard to acquire all of the shares in Caltex by way of a scheme of arrangement. The proposed indicative cash price is $35.25 per share, less any dividends declared or paid by Caltex.
Alimentation Couche-Tard has made earlier approaches, beginning late last year, to acquire all of the shares in Caltex at indicative cash prices of $32.00 and $34.50 per share. These approaches were rejected by the Caltex Board.
The revised proposal permits Caltex to pay a special dividend to shareholders.
Alimentation Couche-Tard indicated that its revised price is its best and final price in the absence of a competing proposal. The Caltex Board has stated it is currently considering this revised proposal.
Caltex management cautioned the market, however, that the revised proposal is subject to various conditions and said there is no certainty it will result in a change of control transaction.
Caltex refiner margin update
In a second and separate announcement to the market this morning, Caltex provided an update on its Caltex Refiner Margin (CRM) in respect of CRM sales from production for January 2020.
The January 2020 CRM was US$5.78 per barrel (bbl), below the Q4 2019 CRM of US$7.51/bbl and the prior year comparative. Strong operational performance saw CRM sales from production in January 2020 of 551 ML, which is above the prior year comparative.
The January 2020 Caltex Singapore Weighted Average Margin (SWAM) came in at US$10.43/bbl. This was lower than the Q4 2019 SWAM of US$12.75/bbl.
Caltex noted the decrease in SWAM was due to soft global demand for gasoline and distillates, including less demand for diesel for marine consumption than expected by many industry participants.
January CRM continued to be impacted by higher landed crude oil premiums. The transition of the shipping industry to new International Maritime Organization regulation resulted in premiums remaining elevated in January.
There was noted to be no impact on January CRM from market disturbances related to the coronavirus. Caltex commented it is monitoring conditions carefully, particularly in relation to the potential impact on regional refining margins and product demand, and will adjust crude sourcing and refining plans based on any market impacts.
