Sources close to the $3.3bn Viva Energy have swiftly rebuffed suggestions that it could be part of a takeover attempt for Caltex with EG Group and potentially interests associated with Macquarie.

But that does not mean it will pass up an opportunity to buy its assets further down the track.
Britain’s EG Group is believed to have been trying to build a consortium for a rival bid for Caltex, and Viva Energy has been named in the market as one of the groups involved, although sources close to Viva say it is not an interested acquirer.

However, the understanding is that an EG Group proposal would only be put forward if the Caltex board recommends the revised bid for the company by Alimentation Couche-Tard.

The sweetened deal values the company at $8.8bn and is now the best and final offer from the Canadian company.

Viva Energy owns more than 1250 petrol stations and the Geelong Refinery and listed in 2018, with vendor Vittol earlier floating off the petrol station sites to create the Viva Energy REIT.

Speculation has emerged that Viva Energy is poised to offload a 30 per cent interest in Viva Energy REIT, a deal that could yield it a windfall of about $600m and go some way in funding any deal to buy part of Caltex.

Jefferies has been working with EG Group. Its recently appointed head of equity capital markets Peter Molesworth was the banker who helped to float Viva Energy last year when he was at Deutsche Bank.

While it is unclear how the Caltex business would be carved up by the parties, some market analysts believe that it would be hard to find a group that has an interest in the Lytton refinery in Brisbane that Caltex owns.

New York-based Global Investment Partners is said to have had some interest in buying infrastructure assets, but not the refinery.

Charter Hall is said to be exceptionally keen to buy the Caltex real estate sites from any successful acquirer of Caltex.

This is at a time that they remain subject to a possible $1bn initial public offering by Caltex should suitors be unsuccessful in their pursuit of the company.

Last year, there were suggestions that Charter Hall was in exclusive due diligence to buy a stake in the portfolio of service station sites.

Issues with tax caused Caltex to pull the plug on that deal.

While some are dubious about whether a break-up of Caltex could work, some say there are merits in such a deal where assets are sold but contracted out to Caltex in a similar way to a property sale and leaseback.

If the wholesale arm of Caltex was not exclusively on offer to the chain of retail convenience stores, it would lose its competitive advantage.

However, sources say the Caltex board has explored breaking up the business before but have not been able to make this work.

Shares on Friday closed at $33.55.

Extracted from The Australian