Alimentation Couche-Tard is yet to call off its plans to take over Caltex.

Yet some take it as a given that if it proceeds, any offer would need to be lower than the $8.8bn it has had on the table.

The Canadians have carried out due diligence, but most believe any offer now would likely be below $30 per share, a price the Caltex board would be unlikely to accept.

The market on Friday was pricing in the idea that no deal will proceed, with Caltex’s market value at $5.65bn.

Analysts say any major deal is impossible with debt markets shut. Still, some believe this should not be a foregone conclusion because the Canadian convenience store retailer is very keen on the business, and was still talking up the prospects of an acquisition in its results this month.

Caltex is likely to recover better than companies operating in other industries, given that fuel is seen as essential and its balance sheet is robust.

In the oil and gas sector, many do not believe any major M&A transactions will happen for some time, with the oil price languishing in the $US20s-a-barrel range and expectations it could fall to $US15, with the economy expected to take time to stage a recovery.

On paper, Oil Search, which has one of the best LNG projects in the world, may look like an attractive proposition for a company such as Woodside Petroleum or one of the super oil majors. The market value of Oil Search has fallen to $3.7bn from about $10bn last month.

But the consensus around the market is that most players will be battening down the hatches to weather the storm.

Extracted from The Australian