It’s popcorn time at Caltex Australia.

Just as dealmakers were trying to clear the decks ahead of the summer holidays, there’s a big battle brewing that threatens to put vacations on hold.

In the blue corner is Canadian convenience retailer Alimentation Couche-Tard, worth about $60 billion, which wants to buy Australia’s Caltex for $10 billion.

In the red corner is Caltex, which has been fending off break-up calls for years and cannot seem to find a way to unlock value from its giant $834 million pile of franking credits.

Couche-Tard started the battle with a $32 a share indicative bid last month, before returning at $34.50 last week. Its punch was laced with a franking credit pitch, telling Caltex shareholders its bid could be worth up to another $3.61 a share for the right investor.

Caltex batted away the first and is still considering the second. Its defence started with long-awaited plans to just do something; and its something of choice was creating a new property station trust and floating it on the ASX, cheekily announced this week.

The question is whether there are any other starters – and who they may be. Couche-Tard and its advisers Goldman Sachs and Allens should have a good lay of the land, having been in the Woolworths petrol auction last year.

Should UBS and Grant Samuel-advised Caltex set up a data room on the back of a $34.50 a share indicative bid – and that is not guaranteed – you would think it would spark another tyre-kicker or two into action.

After all, there are plenty of Caltex sum-of-the-parts valuations in industrial banker pitchbooks that are updated regularly in anticipation of the brewing battle. Macquarie Capital – for years Caltex’s house adviser – would be sure to have a few ideas, while Citi also has long ties to the fuels company.

While Caltex shares jumped 13.4 per cent to $33.79 on Tuesday, it is worth remembering Couche-Tard is at square one. While the Canadian convenience retailer has had a big team running the numbers on Caltex, it has been looking from the outside.

It is understood Couche-Tard has had no due-diligence materials or management meetings, and has not even had the chance to negotiate customary actions like standstill or confidentiality agreements. Although it does have a 2 per cent stake.

There’s clearly plenty left to play out.

Extracted from AFR