Australian fuel retailer Ampol is believed to be mulling a float of its New Zealand service station business as it gets set to announce a $NZ2bn-odd deal to buy rival Z Energy.

Ampol is tipped to announce as early as Monday that it has reached a deal to buy the New Zealand fuel retailer Z Energy after putting forward an indicative $NZ3.78 per share proposal to gain exclusive due diligence.

Its four weeks of due diligence ended two weeks ago but it was granted a further two week extension.

DataRoom understands that Ampol finished its due diligence on Z Energy at the start of October, but the extra time was needed to negotiate dividend payments to shareholders.

If the transaction takes months to finalise due to delays in gaining approval from New Zealand’s Commerce Commission and its Overseas Investment Office, shareholders may miss out on a dividend payment. Expectations are that Ampol may lift its offer by about NZ8c or NZ9c per share to compensate Z Energy shareholders for that risk.

The offer was a 22 per cent premium to Z Energy’s last closing price when the deal was announced in August.

Ampol owns 106 Gull petrol station sites across the Tasman. The Commerce Commission is likely to insist on a sale of those assets.

One option under consideration is launching an initial public offering for that part of the business, thought to be worth up to $NZ600m.

The Gull business generates about $NZ50m of earnings before interest, tax, depreciation and amortisation.

It was purchased by Ampol for $NZ340m in 2017.

Z Energy operates 133 service station sites in New Zealand with the Caltex brand and 197 carrying its Z Energy branding.

Some think Ampol could once again be in the cross hairs of Canadian suitor Couche-Tard once it is has bedded down Z Energy. Couche-Tard made an $8.8bn proposal to buy Ampol in 2020, but backed away in April last year.

Ampol is working with Macquarie Group for its proposal, which followed three earlier offers at $3.35, $3.50 and $3.60 per share. Z Energy is working with Goldman Sachs.

The recent closure of New Zealand’s only oil refinery at Marsden Point in Northland, which Z Energy part-owned, offers Ampol a potential earnings stream.