12
Oct

Ampol gets Z Energy deal, scraps equity raising

Ampol has shored up its $NZ3.78 a share bid for Z Energy, and thrown in another NZ5¢ for a good measure.

After months of takeover talks, and six weeks in the data room, Ampol and Z Energy signed a scheme of arrangement late on Sunday night.

The kicker for Z Energy’s board and its shareholders was the extra NZ5¢ a share, which would be paid as an interim dividend for the half year ended September 30.

Ampol told its shareholders the deal would be double-digit accretive at the earnings per share line and 20 per cent free cash flow accretive in 2023.

Importantly, it said it would fund the transaction mostly with debt.

There was no mention of the previously flagged equity raising – other than to say it was doing everything it could to avoid or minimise one – and instead it flagged a potential new hybrid issue, which could be worth about $600 million.

It is understood Ampol’s change of funding plans came after talks with its own shareholders, who were happy to see the fuel company use its ample balance sheet.

Ampol should also have some proceeds from its pending divestment of NZ unit Gull.

Ampol’s head of M&A Chris Richmond oversaw the acquisition, along with Macquarie Capital. Goldman Sachs advised Z Energy.

Extracted from AFR