The $7.6bn fuel refiner and distributor Ampol is understood to have hired investment bank UBS for a tilt at its $2bn rival 7-Eleven, which is up for sale through Azure Capital.
The advisory firm Azure is understood to have now received first-round bids for 7-Eleven, and sources have said that UBS had been working hard on an offer for a strategic player, believed to be Ampol, in the lead-up.
Ampol most recently worked with investment bank Macquarie Capital, in 2021 when it purchased Z Energy, which was advised at the time by Goldman Sachs.
But when Ampol (then known as Caltex Australia) fielded a $9bn buyout proposal in 2019 from Canadian convenience retail giant Couche Tard, investment bank UBS was there for Ampol helping with its defence.
Bids have now landed for the business that has been spitting off large amounts of cash – it generated about $220m of annual earnings before interest, tax, depreciation and amortisation in the past year.
The contest for the convenience retailer owned by the Withers and Barlow families was expected to be dominated by strategic players, as private equity firms are said to be sidestepping the sale process due to the high cost of debt and the company’s exposure to the oil refining and tobacco industry.
Investors in private equity firm funds are becoming increasingly conscious about environmental, social and governance factors when making their investments.
There is also the trend towards electric vehicles, and what would be the exit strategy for the fuel convenience group in the coming years remains a concern for buyout funds.
It calls into question whether Canadian-based rival Couche Tard remains in the mix, while another global strategic group is EG Group.
The obvious buyer is Seven & I Holdings, which is based in Japan and owns 7-Eleven Japan.
It has pre-emptive rights and is known to be a keen buyer.
The big challenge for Ampol remains how it navigates concerns from the Australian Competition and Consumer Commission.
7-Eleven operates everywhere in Australia except Tasmania, the Northern Territory and South Australia, which creates growth opportunities for the buyer.
It has a licence to operate and franchise 7-Eleven stores in Australia from the US-based 7-Eleven.
Its 750 stores are located across Victoria, NSW and Western Australia, processing 250 million transactions each year.
Extracted in full from: DataRoom: Ampol taps UBS for 7-Eleven sale | The Australian