Canada's Couche-Tard halts S$7.97b bid for Caltex Australia on coronavirus uncertainty

[BENGALURU] Canada's Alimentation Couche-Tard said it has decided not to proceed with an A$8.8 billion (S$7.97billion) takeover bid for Caltex Australia Ltd due to economic uncertainties posed by the coronavirus pandemic.

Couche-Tard said in a statement it may re-engage with the Australian convenience store, petrol station and refinery company once there is sufficient clarity on the global outlook.

In a separate statement, Caltex said it remained well-positioned as an independent business, but would be willing to consider any future approach.

Couche-Tard raised its offer in mid-February, while privately-owned UK convenience store retailer EG Group made a rival offer of A$3.9 billion in cash for Caltex's convenience stores plus shares in a spin-off company made up of its refining and fuel distribution assets.

Couche-Tard said that while it has secured all necessary financing and Caltex remains an important part of its Asia Pacific expansion strategy, it was not in a position to make a revised proposal at this time.

"Our current plan would be to re-engage the process once there is sufficient clarity as to the global outlook, and the work done to date should mean that we will be able to quickly formalize our proposal at that time," Brian Hannasch, President and Chief Executive Officer of Couche-Tard, said.

As a big supplier of jet fuel in Australia, Caltex has been hit particularly hard by airlines grounding their fleets.

Caltex, however, said that it was ready to weather market uncertainties owing to cost cutting measures, while lower crude prices were also expected to reduce its working capital requirements.

"We remain confident in the strength of Caltex as an independent business, and should we receive an approach in the future would be willing to consider it on its merits," Caltex Chairman Steven Gregg said.

REUTERS