Punters are starting to wonder if there will be a higher offer from the Canadian convenience store giant, ACT (Alimentation Couche-Tard) or a rival group with shares in Caltex edging higher again yesterday to go with Tuesday’s solid rise after the approach was revealed.
In fact, Caltex Australia shares rose 2% to $34.48, just under the $34.50 suggested offer price from ACT, a new 20 month high.
But not everyone is convinced there will be a higher bid or that the existing approach will find success.
Analysts at Ord Minnett yesterday downgrading Caltex shares to neutral from accumulate with a price target of $32.
“We downgrade our recommendation based on valuation,” Ord’s said in a note to clients.
It cautioned that Caltex has yet to engage with Couche-Tard, with the path to engagement “uncertain”, while adding that FIRB approval “may not be easy given the nature of the infrastructure and terminal assets”.
“Caltex holds an irreplaceable network of strategically important assets in Australia. This includes the largest tank farm in the southern hemisphere at Kurnell, the Lytton refinery and associated Brisbane terminal infrastructure and terminal infrastructure around Australia, including in attractive markets,” it said.
“Given the quality of its infrastructure, Lytton being one of four remaining refineries in Australia, and the vital nature of transport fuels to the Australian economy, we suggest FIRB approval remains a risk for Couche-Tard,” Ord’s note said.
