AUCKLAND, NEW ZEALAND: Z Energy (ZEL) has received a non-binding indicative proposal from Ampol to acquire Z Energy at an offer price of $3.78 per share.

The proposal would be implemented by way of a scheme of arrangement, a court-supervised process under which a meeting of shareholders would be held to vote on the transaction.

Ampol is an Australian based retail fuels and distribution business that is listed on the Australian Securities Exchange (ASX). Ampol owns and operates the Gull fuel distribution business in New Zealand. The offer price under the current proposal represents a 22% premium to the last close on 12 August 2021, and a 26% premium to the 30-day VWAP.

The Proposal from Ampol follows earlier unsolicited, confidential and non-binding indicative proposals in the form of letters or verbal communications to ZEL for $3.35, $3.50 and $3.60 per share.

ZEL and Ampol are discussing the option to include a partial Ampol share consideration and/or a secondary listing of Ampol on the NZX. The Board has sought external advice and carefully considered each of the non-binding indicative proposals made by Ampol.

Although the Board considered that the earlier proposals did not value ZEL’s business sufficiently to justify the requested exclusivity or confirmatory due diligence access, the Board’s assessment of the most recent Proposal is that it would now be in the best interests of the company and shareholders to grant Ampol a four week period of exclusivity for Ampol to undertake confirmatory due diligence, develop their proposal and for the parties to negotiate transaction documentation.

The acquisition is subject to agreeing the binding transaction documentation, Board approval by both ZEL and Ampol, ZEL shareholder approval and High Court approval.

Any transaction is expected to be subject to approval by both the New Zealand Commerce Commission and the New Zealand Overseas Investment Office. Ampol is confident that the required regulatory approvals will be obtained.

ZEL Chair Abby Foote said, “Although this proposal is subject to further development and evaluation by both parties, the Board supports a period of exclusive engagement with the objective of developing a transaction that would be acceptable to the Board and shareholders. The Board will always act constructively in the best interests of the company and its shareholders.”

ZEL CEO Mike Bennetts said, “While the Proposal is developed further and evaluated, Z remains committed to safe and reliable operations, meeting the needs of our customers as well as delivering on the many initiatives we recently announced at our Investor Day to create further value for shareholders.” www.z.co.nz