Australian fuel retailer Ampol has made a $2 billion takeover offer for Z Energy.
Z Energy. (File photo) Photo: RNZ
Ampol, which owns small local fuel seller Gull, offering $3.78 a share, a 24 percent premium to Z's closing price on Friday.
Z Energy said it had rejected three previous offers between $3.35 and $3.60 a share, but regarded the latest as one that should at least be followed up.
"The proposal from Ampol follows earlier unsolicited, confidential and non-binding indicative proposals in the form of letters or verbal communications to Z."
Z chief executive Mike Bennetts said it was only the beginning and nothing was certain.
"You'll note we've not recommended the offer we've got from Ampol, we've simply granted them a period of time to let them do their due diligence," Bennetts said.
Ampol has been given four weeks to conduct a detailed look at Z Energy's finances and business, during which time Z's board cannot pursue any other offers that might emerge.
"At the end of that period we'll come back together with them and agree what is the best proposal they can put forward and we'll be able to take that to our shareholders if we think it's at a level that's in our shareholders' interests," Bennetts said.
A potential stumbling block in getting official approval from the Commerce Commission would be Ampol's ownership of small local retailer Gull Petroleum, which Bennetts said would likely have to be divested if any ultimate deal were to succeed.
The two businesses were quite similar in their current operations, both offered full service to consumers and faced similar challenges in looking for alternative business as they contended with decarbonisation of transport, he said.
Ampol, which indicated it might also list its shares in New Zealand, said Z Energy was an attractive growth option.
"A successful transaction will create a trans-Tasman leader in fuel with significant regional scale and an integrated supply chain ... (the) combined entity would provide a new and larger platform to accelerate the energy transition in both Australia and New Zealand," it said in a presentation.
It would also offer fuel security and support local industry in New Zealand, it said.
Speculation about Z Energy's future and its attraction as a cheap takeover prospect has been swirling for some time, as its shareprice has slumped over the past two years in the face of falling earnings and profits as oil prices and margins have fallen and Covid-19 has hit demand.
Any deal would need approval from shareholders, the Overseas Investment Office, and the Commerce Commission.