Caltex is understood to be in the final stages of negotiations to buy Woolworths’ $1.5 billion portfolio of petrol stations.

There are said to be several hundred retail outlets that are being sold by Woolworths through Morgan Stanley and it is now believed Caltex is the sole bidder.

Caltex, advised by UBS, has spent recent years in search of attractive deal opportunities that would capitalise on its retailing expertise.

The pressing question is what the competition watchdog would say about such a transaction between two market heavyweights. Caltex was blocked from buying sites from its rival, Mobil, in 2008 by the Australian Competition and Consumer Commission, but market analysts have pointed out that the industry dynamics have since changed.

How much Woolworths would secure from the sale is unclear, but sources say the transaction would likely be about $1.5bn. All other rival companies eager to secure the assets would also find competition issues, which would likely be appeased through the sale of various sites.

The petrol stations are being sold as part of a plan by Woolworths to shed non-core assets and focus on its core business of food and liquor.

There are 600 petrol outlets, co-branded Caltex Woolworths, which are owned by Woolworths but supplied by Caltex.

The company is understood to own a small number of petrol stations, which remain in partnership with Woolworths as the retail supplier.

A potential scenario is a deal whereby Woolworths is able to offload the stations but maintain its branding on the chain of service station outlets.

Meanwhile, Royal Dutch Shell sold 45 million shares yesterday in Beach Energy in a $28 million deal.

Shell secured a small stake in Beach through its acquisition of BG Group, and Thursday’s trade represented an interest of about 2.4 per cent in the business.

Shares closed up 6c to 66c yesterday, and the shares were sold at 63c each.

It was one of two equity capital markets deals executed by UBS yesterday, with the other being the $NZ60m ($56.9m) equity raising by CBL Corporation to fund the insurance firm’s growth.

Extracted from The Australian.