Some news on Monday from funerals group InvoCare, which has knocked back the recent bid by TPG Global, and Ampol, who has received some bad tidings from its Lytton refinery.
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Back to the drawing board for aggressive private equity investors TPG Global after Australian funerals group InvoCare (ASX: IVC) said no go – for the time being – on Monday.
TPG has to decide whether to go hostile, or sit and wait and abandon the derivative positions that allowed it to claim it controlled 17.8% of InvoCare when it made the non-binding offer on March 7.
TPG bought a 2.1% stake in its putative target on March 7 for $15 million. The suggested offer price was $12.65 a share.
In a statement to the ASX on Monday, InvoCare said it had concluded that the $1.81 billion cash offer from TPG Global had failed to provide compelling value to its shareholders.
That means InvoCare currently is not ready to grant TPG Global access to its books, it said.
But InvoCare left the way open for TPG to return by offering to provide TPG Global “access to limited, non-public financial information on a non-exclusive basis. The provision of this information is subject to certain conditions including the signing of an appropriate confidentiality and standstill agreement.”
InvoCare said that will allow the market to see if TPG is “able to formulate a revised proposal that the Board could support and in respect of which it could grant TPG full access to due diligence.”
“There is no certainty that the Indicative Proposal will result in a revised proposal or a transaction being put forward to InvoCare shareholders for consideration,” InvoCare pointed out.
That decision seems to have been well anticipated by the market as InvoCare shares had closed at $11.72 on Friday, well under the mooted TPG price of $12.65.
InvoCare shares rose 1.2% to $11.86 at the close on Monday after the statement was issued. Might a higher bid be in the offing?
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Ampol (ASX: ALD) is facing the loss of up to $50 million from an equipment breakdown at its Lytton oil refining operations in Brisbane.
The company told the ASX on Monday morning that it doesn’t expect any disruption to customers, even though the problem will restrict the production of petrol for the next six weeks or so.
“During this time the refinery will continue to operate, producing diesel and jet,” Ampol said on Monday.
Ampol said it will source “replacement finished product currently being secured through its Trading and Shipping capability.”
The company said the problem emerged in a part in its key oil cracking unit at Lytton (which breaks down hydrocarbons).
“As a consequence of an issue with the slide valve in its Fluidised Catalytic Cracking Unit (FCCU), Ampol has temporarily ceased operating the FCCU to conduct maintenance on the valve.
“Ampol expects the FCCU to return to service in early May after completion of repairs and attainment of steady state operations. .
“Based on recent product crack spreads, the impact of the outage on EBIT (earnings before interest and tax) is expected to be within the range of $30-50 million, including the cost of the repair and lost opportunity cost from sale of gasoline at higher product cracks.”
Ampol said that since its results announcement on February 20, “market conditions have continued to be favourable providing a strong start to the year for Ampol’s integrated business.”
Ampol will provide further details at its first quarter trading update on April 27.
The shares eased 1.2% to 429.87.
