ZEL - Z Energy.

[bottomfeeder]

everyone agree that it's not too late to jump in and that the take over offer will not just disappear?

It's a non binding offer at this stage. Market seems to think that it will fail on a number of counts. Commerce comm approval is one. Let's hope someone else is in the wings waiting.

[see weed]

Anyone notice Morningstar updated their valuation today from $5 something to $3.78c..

[Balance]

It's a non binding offer at this stage. Market seems to think that it will fail on a number of counts. Commerce comm approval is one. Let's hope someone else is in the wings waiting.

One month due diligence is a long period and many things can change. Also, Ampol could conceivably make a lower offer after due diligence if no other offer emerges in the meantime.

We all recall what happened with MetLife.

[Beagle]

Ampol may have to sweeten Z Energy offer, as rivals are tipped to emerge https://www.nzherald.co.nz/business/...NH5EALHE57YSU/ Paywalled
On the face of it Ampol's $3.78 bid for Z Energy appears reasonable, in our view a higher price will be required to secure a deal," Forsyth Barr analysts Andrew Harvey-Green and Mark Robertson wrote in a note to clients. Z Energy's decision to open its books to the Sydney-headquartered company for four weeks "is designed to entice a more attractive bid from [Ampol], flush out other possible suitors and enable it to talk to shareholders".

[Habits]

Anyone notice Morningstar updated their valuation today from $5 something to $3.78c..

Yes saw that ... if fundamentals gave a $5 valuation then lowball takeover bid aside, what changed to cause a lower valuation

[biker]

Yes saw that ... if fundamentals gave a $5 valuation then lowball takeover bid aside, what changed to cause a lower valuation

We reduce our fair value for Z Energy by 33% to NZD 3.78, in line with the Ampol's bid. The decline in value is in accord with the terms of a proposed merger and our prior stand-alone fair value estimates. Merger and acquisition activity continues at a frenetic pace in the Australasian fossil fuel space, coronavirus fragility and carbon concerns marking some as prey. This time it has moved downstream to the refined fuel retail segment. Ampol is proposing an NZD 3.78 per share cash offer for Z Energy via scheme of arrangement. Australia's largest refined fuel retailer has been granted a four week-exclusivity period in which to undertake due diligence prior to formalising the offer for its smaller New Zealand counterpart. Ampol is also considering an option to include a partial share consideration and secondary listing on the NZX.

Despite there being no certainty that discussions will result in a binding agreement, we think the chance of success is high. The latest is apparently the fourth in a series of non-binding offers from Ampol, including at NZD 3.35, NZD 3.50, and NZD 3.60 along the way. And there is logic to a merger–Ampol and Z have very similar business models. Z Energy's board wouldn't have opened the books if the chance of a deal proceeding was low. At NZD 3.78 Ampol will be getting Z Energy at a material 33% discount to our NZD 5.60 stand-alone fair value.

Our formal recommendation for Z shareholders is don't accept, based solely upon the offer's material discount to our NZD 5.60 standalone fair value. However, we suspect that advice is likely to prove academic. Z shares rose just over 14% on the day to NZD 3.48, though still 8% below the proposed bid level. They have moved just into 4-star territory from 3-star prior.

Ampol intends to fund the acquisition via a combination of new debt, potential divestments, and an equity issuance in the order of AUD 600 million. The equity issuance may take the form of partial share consideration to Z shareholders.

[dreamcatcher]

We reduce our fair value for Z Energy by 33% to NZD 3.78, in line with the Ampol's bid. The decline in value is in accord with the terms of a proposed merger and our prior stand-alone fair value estimates.

Morningstar reduced their valuation to match Ampol's bid ..........am I missing something here

[McPussPuss]

Is this standard practice or just lazy? They are pretty clear it's not what they put the value at.

[peat]

The way I see it is they're just being practical in that , they consider the bid will succeed at that price and hence thats what you will get so thats what its worth. They still mention their $5 level as fair value.

[see weed]

The way I see it is they're just being practical in that , they consider the bid will succeed at that price and hence thats what you will get so thats what its worth. They still mention their $5 level as fair value.

Wait a few months after sold for $3.78c and value will return to $5. Good for Aussi bank to support Aussi companies valuation. Good post from biker above.