10
Aug

Vitol, Ampol in the spotlight as Z Energy pursuit continues

The focus is narrowing on global fuel trader Vitol and Australian listed fuel retailer Ampol as the suitors circling the $1.4bn New Zealand dual-listed fuel distributor Z Energy.

As reported by DataRoom last week, Z Energy is believed to be in the crosshairs of at least two suitors, and the company has drafted Goldman Sachs as its defence adviser.

On the face of it, buying Z Energy seems in contrast to Ampol’s strategy, which involves a focus on energy and mobility, but sources say the company’s M&A team has been busy working on a transaction.

The opportunity to sell fuel to Z Energy at a time when the country’s only oil refinery faces closure could appeal to Ampol, which in 2017 purchased the Gull New Zealand business for $NZ340m, comprising more than 100 fuel sites.

Recently appointed chief financial officer Greg Barnes is said to be a smart operator.

But the refinery closure means a deal also makes sense for a major oil trader like Vitol.

Vitol had a spectacular 2020. The world’s largest independent oil trader reported its best ever result and reportedly paid out $US2.9bn to executives and staff through share buybacks, as it capitalised on the volatile oil price. Net profit was $US3.2bn.

Vitol’s 2014 deal to buy Shell’s Australian portfolio of petrol stations and later its Geelong Refinery for $2.9bn proved to be highly lucrative for the Swiss trader. It sold off the petrol station sites in 2016 through an IPO of the Viva Energy REIT, which had a market value at the time of $1.5bn, before floating the energy business, comprising more than 1100 petrol stations, at a value of $4.86bn.

Vitol is close to Bank of America, which worked on the Viva IPO and the Shell sale.

Bank of America declined to comment on whether it was working on a Z Energy transaction, as did Vitol.

PetroChina and Swiss multinational trading company Trafigura are also possible buyers of Z Energy.

Sources say approaches may have already been made.

Z Energy is listed in both Australia and New Zealand.

It distributes fuel and has 208 branded service stations and about 160 truck stops.

It owns some of the former NZ assets of Shell and Chevron.

As well as a 15.4 per cent stake in Refining NZ, it owns a 25 per cent stake in Loyalty New Zealand, which runs Flybuys, and has pipelines, terminals and bulk storage terminal infrastructure.

Extracted from The Australian