WELLINGTON (CU)_Earlier this month, the shareholders of the New Zealand Refining voted to close down their Marsden Point refinery, the country’s only oil refinery, and convert it into an import terminal. This means that the Pacific island nation would be all-import market, which would purchase already refined fuel from larger producers offshore. At a time when such a significant change is taking place in the country’s fuel market, an Australian petroleum company has made a $2.5 billion-odd bid to acquire the largest fuel retailer in New Zealand.
It has now been revealed that the Sydney-based Ampol has been in advanced talks over a takeover proposal to acquire Z Energy, headquartered in Wellington, with the aim of forming a trans-Tasman industry giant. According to sources, an offer of mid-$3 a share was made by Ampol, implying a valuation of about $2.5 billion for the dual-listed Z Energy.
The Australian petroleum company, which is being advised by Macquarie Capital, is best known for its petrol station across the Pacific nation. It is currently sitting on a healthy balance sheet, with net borrowings worth $434 million by the end of 2020, particularly following a real estate spin-off last year. The company’s long-term gearing target is to maintain net debt worth between 1.5-times and 2-times its EBITDA. Analysts project the Australian petroleum company to report $1.08 billion EBITDA this year, and fro this figure to reach $1.175 billion next year.
According to experts, the recent move to shut down the Marsden Point refinery makes, Z Energy, which has over 300 petrol stations, a much more attractive for global and regional giants in the fuel industry who are looking to for a place to sell their supply. They forecast that the acquisition of the Wellington-based fuel retailer could add another $5 billion to Ampol’s sales in less than 5 years and about $350 million in EBITDA, pre synergies.
