The company launched its bid in November and upgraded its offer twice more, to $35.25, which Caltex deemed too low, but which now represents a very large premium to its current price of $21.60. It is down almost 8% today.  

 

It has kept the channels open for dialogue, granting due diligence to the suitor and also took a second, more complex cash-and-scrip offer from Britain's EG Group, which it knocked back. 

 

During a March earnings call Couche-Tard CEO Brian Hannasch said "our first and foremost goal is to make sure that any transaction we do will deliver appropriate returns to build long-term value for all of our stakeholders". 

 

"We're in the middle of our due diligence process. 

 

"Caltex has a very strong team with a high level of expertise around the full value chain."

 

However it has said it sees Caltex as both a strong strategic fit for its business and "an important potential component of its Asia Pacific strategy" Caltex said today. 

While it could secure financing, the company told Caltex it would be prudent to reengage when there the global outlook is little more certain. 

 

Caltex said the relationship between the two companies has been strengthened through the process.

 

"Since receiving the unsolicited approach from Couche-Tard in late 2019 the board has carefully assessed all the proposals received with a focus in maximising shareholder value," chairman Steven Gregg said.

 

"The Caltex and ATD teams have worked together constructively during the engagement period despite the challenges form COVID-19.

 

"We remain confident in the strength of Caltex as an independent business, and should we receive an approach in the future would be willing to consider it on its merits," he said.

 

Caltex's quarterly was separately released today. 

 

Caltex cut capital expenditure and brought forward and extended its Lytton refinery turnaround and inspection this year. 

 

It has $2.7 billion of committed available debt faculties and $1.4 billion cash and in drawn committed facilities.

 

It does not have debt facilities that mature this year and it said the fall in the price of oil is also expected to "meaningfully future reduce the group's working capital requirements".

 

"The unrivalled combination of deep customer relationships, privileged infrastructure and property assets and core strength in managing complex supply chains, creates a platform for unlocking and creating further value for shareholders," interim CEO Matt Halliday said.

 

It also said "significant progress" had been made on the plans it outlined at last year's investor day which include the sale of $136 million of retail sites, preparation of key retail property IPO transaction documents and the beginning of both international storage and the Ampol Houston trading and shipping office.

 

Other capital initiatives might include a 49% divestment of its freehold retail sites via listed property IPO or trade sale alternative, divestment of a second tranche of HBU sites and issue of hybrid capital securities.

 

"Clearly, any deal discussions in this environment are difficult and it should not come as a significant surprise that talks have been put on hold," RBC Capital Market analyst Ben Wilson wrote this morning. 

 

"Couche targets doubling its EBITDA over the next five years, and we think Caltex may represent an opportunity to realise that should Couche re-engage with Caltex.

 

Caltex is down almost 8% today at $21.60.