Viva Energy’s market debut on Friday would have been closely watched by Woolworths with the expectation that it too will embark on an initial public offering for its petrol stations.
The expectation is that Woolworths will head to the boards with its chain of 527 petrol stations that were supposed to be sold to BP.
The $1.8 billion acquisition of the assets by the oil giant was blocked by the Australian Competition & Consumer Commission.
Plans for an IPO have been afoot since March this year, with adviser Morgan Stanley and the supermarket chain preparing themselves for the strong chance that the BP deal would not proceed.
There had also been a process running to sell about half of the portfolio, with groups including KKR, Peregrine Corporation, which owns On The Run, Macquarie, Couche-Tard and PetroChina all interested at various stages.
But some now question whether any of the parties would remain interested in the assets following the partnership Woolworths has entered into with Caltex.
The arrangement includes a 15-year fuel supply agreement plus a deal to jointly create a convenience retail offering across 250 Caltex retail sites.
While the supply deal provides additional earnings, the problem for prospective buyers is that it creates too many constrictions.
Much of the reasoning for acquiring the petrol stations for bidders would have been for the opportunity to supply more fuel, so the deal for Caltex means that they would now not be able to justify a strong price for the business.
The most promising option for Woolworths will probably be an IPO through advisers UBS and Morgan Stanley.
However, even a float may not be easy, with Viva Energy shares closing more than 3 per cent lower on their first day of trade on Friday.
This was despite shares being priced for the IPO at the bottom of the range at $2.50 each.
Staying on IPOs, it is understood that analyst research for the float of Latitude Financial is a few weeks away.
The recent plan was to hold analyst briefings this week, but perhaps the large number of advisers on the ticket has slowed things up.
Extracted from The Australian