Not to worry, if all fails, this could be a good div paying stock. Monday 11/10/21 should be another update. No other suitor as far as I know. We should forget about Ampol and their poxy offer and look forward to the next div.:)
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Off 4c today on volume of 2m
Leaky ship?
Long lunch and champagne flowing at Shed 5 ….Z execs local
As long as they don't pay the bill with our divvies 🤣
NZ Herald's stock take :
"Z Energy shareholders will soon find out whether Ampol is prepared to up the ante for the fuel supplier.
In August, Z Energy received a non-binding indicative offer from the Aussie retail fuels company at $3.78 a share.
Late last month, Z Energy advised that the original four-week exclusivity period with Ampol had been extended by a further two weeks, "to enable outstanding matters to be addressed" and to determine whether key terms can be agreed.
"There is no certainty that discussions between Z and Ampol will result in any agreement on a transaction," Z Energy said at the time.
Now, Z Energy expects to provide an update to the market on or before Monday.
The two-week extension suggests behind-the-scenes haggling, and a revised offer price of somewhere north of $4.00 a share is seen in the market as being more realistic.
The conversion of the Refining NZ facility at Marsden Point from a refinery to a terminal - expected to take place in the first half of next year - is understood to have made Z Energy a far more attractive prospect, hence Ampol's interest.
"The market will be looking for a better price," said Mark Lister, head of private wealth research at Craigs Investment Partners.
"My suspicion is that many market participants will view this bid as being a little bit opportunistic, and would like to extract a bit more out of the acquirer."
"There might be a bit more water to go under the bridge on this in terms of negotiations," Lister said. "But from what we see so far, it is far from a knockout blow and I suspect this one will drag on for a bit."
But even at $4.00 a share, Z Energy is still 50 per cent down from its 2016 high of just over $8.
"For long-suffering Z shareholders - who have endured a pretty ugly ride in terms of returns - they would not feel great about a $4.00 bid," Lister said.
The industry's outlook is clouded by the eventual replacement of petrol driven cars by electric vehicles.
"While electric cars are where things are headed, the timeframe for that is debatable," Lister said. "Many would suggest that petrol - and ways to fuel them - will exist for a while yet."
Z Energy comprises some of the former assets of Shell New Zealand and Chevron New Zealand."
Anybody have a sub to the Australian?
"AMPOL eyes NZ service station IPO" published 1 hour ago.
AFR says - It’s down to the short strokes at Ampol and Kiwi counterpart Z Energy, who spent the weekend in back and forth talks to try to iron out a few minor sticking points.
the champagne at Shed5 Friday no doubt celebrating the ‘in principle agreement, while back room guts cross the t’s and dot the i’s
Should be some announcement today, being the deadline for one.
But I doubt there will be anything too definitive yet. Would like to be wrong though.
I'm a long time holder and not that fussed on selling.
Z Energy Board unanimously recommends Scheme of Arrangement - NZX, New Zealand’s Exchange
Z Energy Limited (NZX/ASX: ZEL) (“Z”) has entered into a binding Scheme Implementation Agreement with Ampol Limited (ASX: ALD) (“Ampol”) under which it is proposed that Ampol acquire all the shares of Z by means of a Scheme of Arrangement (“the Scheme”).
Highlights
• Under the Scheme, Z shareholders would receive a cash offer price of NZ$3.78 per share and will also receive the first NZ$0.05 per share of the interim FY22 dividend without adjusting the cash offer price, resulting in overall value to Z shareholders of NZ$3.83 per share.
• If the Scheme has not been implemented by 31 March 2022, the final cash consideration will be progressively increased to reflect FY23 performance, up to a limit of NZ$0.10 per share.
• The Z Board unanimously recommends that shareholders vote in favour of the Scheme, subject to the Scheme consideration being within or above the valuation range specified by the independent advisor and in the absence of a Superior Proposal being made for Z (as defined in the transaction agreement).
• The Scheme is subject to a number of conditions including regulatory approvals from the New Zealand Commerce Commission (NZCC) and New Zealand Overseas Investment Office (OIO).
some really thought they'd get it to above $4... seems they were a bit optimistic and $3.78 (give or take a few cents) was really the highest offer Z could extract.
Holders should be happy, they've still got a massive get out of jail card presented to them.
Can only hope another suitor turns up with a better offer.
I'm glad I got my mate to check out the Z Exec dining room Shed % on Friday ...saw the champagne ..... made for a good weekend to know the takeover was happening
There was enough nervousness on Friday for a few nervous holders to bail out at $3.38 so the all up $3.83 is a pretty good price - 45c or 13.3%.
And it’s a 32% gain for those who participated in the $350m CR last year.
Free up the money and put it into a sunrise industry.
Cmon Shell you know you can do it, last chance, 4.20 will do it.
Well I'm underwhelmed....
Yeh
M+A's not on steroids these days !
One could always save the money for their IPO or buy Ampol. (ADL)
It looks like ADL has done better over the last couple of years although correlation is increasing. Bound to be less volatility.
Attachment 13065
I'm also underwhelmed but as I've said many times this company is a really tired old mutt. Massive investment is required to give this aging thing a new lease of life including larger stores with better food and coffee and EV charging stations at all site's.
Will they change the name from Z to Ampol? Whatever the name, I am sure Z/Ampol will do all you said and convert to EV and cafe etc over time, the same as all other Caltex, BP etc outlets will do over time. Then Z/Ampol sp will probably head back to $10, but only after Kiwis sell to Aussi.;)
brought some today , imagine ampol will change the make up of z retail offer as part of there synergies. ie sell of the convenience shop side of things
Interesting to read Ampol's (ALD) presentation re Z's acquisition.
***
Z Energy acquisition highlights:
Unique opportunity for Ampol to acquire the market leader in New Zealand and deliver strong financial returns
- Z Energy is the market leader in New Zealand with 40% share of New Zealand fuel sales and a similar businessmodel to Ampol
- Creates a Trans-Tasman fuel champion with a combined network of ~2,400 sites and supplying ~23.5 BL pa of fuelto customers in the Asia Pacific region, leveraging Ampol’s unique international supply chain
- Material transition and synergies1 opportunities – NZ$60-80m pa largely via, fuel procurement and overhead costreductions
- Compelling financial returns – targeting double digit EPS accretion and 20%+ free cash flow accretion in 2023
- Creates a stronger platform for development of lower emissions energy solutions for customers across Australia andNew Zealand
***
I'm waiting for the bidding war to start and should be at least a price with 4 in front.
My average buy is ~$4.65 ... so bought a few more to dampen the loss. Obviously not too pleased on where they've landed.
Possibly leave the branding as is, its what Kiwi's have come to know and many would be stupid enough to continue to buy the line that Z is for New Zealand. I read recently that they have changed advertising agencies...(existing advertising was weak in my opinion). Like most things Mike Bennetts and his "leadership" team do its too little and too late.
Some will be genuine synergies but most will be removing egregiously high management salaries that have continued to be paid irrespective of the extremely poor leadership and management. I'm not selling yet either...at the very least the international arbitrage funds will start to get to work here and the price should go a little higher over time. Who knows, another bid might be possible ?
Bought some more at $3.60 - downside covered by the $3.83 Ampol bid with another 10% to 15% potential upside from another bidder. Best risk reward play on the market rather than money in the bank.
Don't really want to wake up tomorrow morning and read in the AFR that another bidder has offered $4.15 and Amnpol has decided to counter.
interesting to see you guys still hangin in.
I've already had two bites at this cherry and unlike you guys and Metlife wont be having a third. My portfolio has a reasonable chunk of Aussie resource so will just leave it there for now.
Z have spouted on about the annual divvy being 19-23 cents, (mid point 21 cents in annual dividends) which suggests a fair interim dividend should be 10.5 cents. In that context to only allow shareholders to have half the dividend they're entitled too Mike, his team and the board have again failed shareholders. (I say "again" because over the years they've consistently failed shareholders with their lack of vision and leadership).
Really the minimum satisfactory deal as I see it is to allow the payment of normal interim and final dividends, (total 21 cps) so I will vote no, (not that my small stake will make any difference).
To Balance's point above which I think is a good one. The current deal as tabled provides the accrual of $3.83 - $3.60 = 23 cents in value between now and 31 March 2022 and after that if the deal isn't implemented by 31/3/21 there's up to another 10 cents in value. Not a done deal yet but 23 / 360 = 6.4% return in 5 2/3'rds months = annual rate of return of 13.5% plus the possibility of a counter offer. Chance of Commerce Commission turning it down but I am confident they will find a work around for that. Definitely not a sell at this point and maybe Balance is right, perhaps its a buy ?
I have an idea. First, is ZEL the only NZ owned petrol etc supplier? If so NZ is going to have to buy all our petrol etc supplies from overseas companies, and all profits are going overseas as most of our banks etc. Why don't someone put on social media that NZ is going to sell our only supplier to aussi and it is going cheap, then tell everyone to quickly buy shares in ZEL and sp will shoot up to $4.50c. Now who wants to sell their shares to aussi now at such a discount of $3.78c:t_down:. I am with Beagle on this and will vote no for this to go ahead, and am looking forward to the next div. So come on NZ, buy now and lets get that sp above $4. Go now and buy 5,000,000 shares before close on Friday, WE CAN DO IT!!! GO YOU LITTLE BEAUTY!!!:t_up:
Sounds like Stakeholders are being ripped over badly on both the Offer amount and the Dividend to me ;)
What are Z's Board smoking to recommend such a low offer and inferring Stakeholders should also get ripped over on
the dividend or is their past 23.0 cps dividend & guidance up the pole ? ;)
Time to deliver some underarm bowling back to AMPOL IMO ;)
Hopefully the major shareholders will vote against it. I would rather keep what we have, unless the takeover was at least 4.20 plus dividends until deal goes through.
Don’t count out a counter bid emerging - Ampol’s commentary on the takeover is compelling reading for any counter bidder as to just what a bargain Ampol is getting.
Heck, Ampol is fully debt funding the takeover!!!! That’s how much it’s bankers love the deal.
Had a really brief look at some of the 108 pages of the SIA document, here, http://nzx-prod-s7fsd7f98s.s3-websit...676/356623.pdf
(DYOR and don't rely on me to read the whole 108 pages because I can assure you that isn't going to happen), but from what I can see the extra consideration (up to 10 cents after 31/03/2022) if the scheme isn't implemented by then accrues at a daily rate that amounts to 1.65 cents per month with a maximum of 6 months. (Annual rate of 5.5% based on $3.60 invested now)
They are targeting completion in the first half of 2022. I think its likely with all the conditions we'll go well into that six month extension period and this won't settle until around July-August 2022...that's my gut feel. Very unlikely to get done by 31 March 2022. Deal is exclusive to AMPOL and in my opinion is almost certain to contain rights within it for them to match any higher offer but I couldn't be bothered reading that far though all that guff. I might give it a week or three and see if another bid is forthcoming and if not...
No big hurry, Beagle to take your gains until a better opportunity comes along.
The arb funds are already hovering up the stock, to be joined soon by the fixed interest balanced funds who will find the yield at anything up to $3.70 irresistible.
Again NZ sleeps ZZZZZZZZ. When the deals done it will be big headline news, and like the banks, boo hoo all our profits going overseas again. The news will read in a couple of years.......ZEL/Ampol doing very well converting to petrol and EV and convenience store and car grooming and cafe outlets. ZEL/Ampol sp is on $5 and are declaring a 50c div, and it will be all over the news and kiwis will say, why did we let that go:(. Come on NZ wakeup! There seems to be a lot of sellers around $3.63 to $3.65?
I could hardly get past the definitions. But there is a warranty that the board is not currently in discussions with any other party, and also will not directly or indirectly, invite solicit etc any other competing bids. The agreement does make allowances for superior proposals and other due dilligence activities, but reasonably the closer we get to the shareholder vote, the less likely any competing bids will be forthcoming. If a competing bid does surface, it would probably have to be more than marginally better as Ampol will just match it. So its like they have raised the stakes considerably. Good advice to wait a few months before selling.
I'm also underwhelmed and will vote "no" when the time comes.
Why are NZ boards such wimps when it comes to takeover negotiations?
I'm not at all happy with the clause in the agreement that allows Ampol to have another bid in the event that a competing offer emerges. The Z board should not have allowed this clause. It is tantamount to an admission that Ampol hasn't made its best offer and won't do so unless a rival bid emerges.
I think such clauses should be specifically excluded by the takeovers legislation.
Z should have told Ampol to put their best price on the table now ie the price that they wouldn't go above in any circumstances - that way there wouldn't be a need for an option to rebid
Is Ampol buying ZEL as is where is? Who is paying for the Marsden refinery conversion to import only terminal? And how much will that cost?
Well ill be voting yes. I sort of see it as now or never for a takeover of Z. The uptake of EV has been faster than many had guesses and now more EV sales than diesel sales. This business lost its way in a dying industry. It will get hit from time to time from lockdowns and the price is full from an ebitda multiple perspective especially considering it just a retailer in a sunset sector. Without a bid this thing will track lower and lower in perpetuity.
Comparative global companies are EV:EBITDA multiples of 7.8x to 9.5x with an average of 8.4x. Ampol is on 7.9x
Offer put ZEL at 12.7x
Seems more than a generous offer on that basis.
No doubt Calibre in independent review will agree and come up with a fair range of $3.55 to 3.90
i be voting yes , be under 3 if not for the deal
Yes...thankyou for sharing that information with me by email last evening. It does appear Ampol are paying a fair control premium for what in reality is a very tired business in a sunset industry. As Fiordland Moose has suggested above, its probably now or never and EV's are selling like hot cakes. If there's no competing bid in the next wee while its time to take the money and run.
Some of those force majeure clauses cover a multitude of evils...if I get especially bored i might drill down some more into those 108 pages and see what else is hiding in plain sight in that large can of worms.
Mined out that information from the 108 pagesQuote:
As at the date of this agreement, Z Energy is not in negotiations or discussions
(other than with Ampol and its Representatives) with any party relating to, or which
may reasonably be expected to lead to, any Competing Proposal.
Does anyone know the land value of all the Z sites in NZ? Has that been considered? And if the deal fell through and sp went back down to $3.10c, that would still be a good yld stock to hold. eg. When the McDonalds brothers sold out to the franchises, that is when McDonald became a multi billion dollar company. The money is not in the hamburgers but in the land. So what we are selling here is not a sunset business, but a new future sunrise business which will house all the new EV recharging outlets.:scared: Come on NZ, lets not loose another company to overseas interests.
Wont most people recharge at home - something you cant do with petrol? People NEED to fill up their car with petrol at a station but wont need to charge at a station for most of their charges. Suddenly youve lost a tremendous proportion of your foot traffic. The land is only worth what it is economically able produce - if it loses that the land value declines. Not even sure but my guess is the offer price is susbtantially higher than net tangible assets. Doesnt matter to me if it goes offshore. It was owned by shell previously and shrill cries of “losing” kiwi ownership is a pretty empty arguement.
Land and buildings is about $400m. Revalued regularly they say
..
Ampol tried to IPO their property assets a year or so ago - think it didn't proceed when they became the target of an acquisition but its back on the agenda. Might be intending to hock off NZ properties at same time.
AFR says Ampol could get $400m to $600m for Gull if sold or spun off as a separately listed company
Previously before covid Z was a $6 baby providing fuel for transport and airlines. Ampol's T/O sees value where holders don't and prepared to pay a premium, furthermore quitting their own Gull brand to acquire............ Goal is to make money right ?
Just curious on others thoughts
...all this makes a lot of sense if like I do think that the current EV trend will be a passing joke and hydrogen will be the future fuel powering EV's . Regarding this scenario, Ampol acquiring Z will be the bargain of the century and Z holders selling now will deeply regret their decision.
I will not sell my shares to Ampol for a bun 'n an egg!
Looks like Ampol mopping up cheap ones on market, looking at huge stacked up volume on bid side
Morning Brief
"Fuel retailer Z Energy was hard hit by the pandemic as the world stopped burning jet fuel and demand for vehicle fuel also declined.
The stock dramatically almost halved in value, from $4.75 in January 2020 to trade as low as $2.52 this May.
However, this changed when Australian fuel company Ampol stepped in with a takeover offer at $3.78 per share that gave investors a possible exit.
Today Z’s board of directors endorsed the takeover offer after Ampol agreed to allow the company to pay out $26 million of dividends to current shareholders, effectively boosting the offer to $3.83.
This sent the share price soaring 6.8% to reach $3.61, still short of the takeover offer which depends on approval from regulators and shareholders, as well as the Marsden Point refinery transitioning to an import operation and final sign off from the high court."
Jet Fuel ready for takeoff shortly..........
Looking at the depth the arb players have woken up and joined the party so we can expect gradual price appreciation with the passage of time. As you said, better than returns on money in the bank but perhaps not without slightly more risk. This hound is starting to fall to sleep with this one...chances of a competing bid looking slimmer by the day...
ampol will sell gull , maybe float the retail stores like ampol did with there network in australia into a property trust and they say ampol has already had pre- lim talks with NZCC during due diligence and the govt maybe supportive due to better fuel security from a bigger player with there own refinery
Something strange going on here lately. Sp been at 3.62 - 3.63 for last couple of days. Some group of holders don't want sp to go up and another lot don't want sp to go down:confused:. Are friends of Ampol keeping sp down to make it look like a better deal?
Lots of water to flow under the bridge before you get your $3.78 and only 5 cents extra in dividend and 1.65 cents per month extra after 31 March 2022.
Some big arbitrage funds will buy that gain they think they are highly likely to get over the period to when the payout occurs, (assuming it does), and lots of others will take the money early and exit.
This sort of situation leads to very heavy depth on both sides and is completely normal and something we saw in the MET takeover situation in recent times. Nothing untoward going on here in my opinion. Holders can either take the money, run and buy some other opportunity or hold and gradually see the share price head slowly northwards as this deal slowly progresses.
Other possibilities exist but are most probably unlikely. 1. A higher offer from another party. 2. A withdraw of this offer for some reason. 3. This deal failing one of the conditions built into the agreement.
Petrol prices: 'Fuel has never been so expensive' and prices could rise higher
https://www.stuff.co.nz/business/126...ld-rise-higher
Fair Offer Price based on this ? Yeah Nah .. Nah ;)
Yup. If/when I go EV I certainly won't be looking to hang around some kind of service station or convenience store to charge up. It'll be at home, work or at the shopping mall or supermarket while I have other things to do.
Our local supermarket location already has several quick chargers installed and I can see this becoming part of the supermarket/mall business model rather than a transition/conversion of petrol stations to some kind of EV hubs. I only see that working if the fossil fuel companies become EV fleet car share companies like Mevo.
Hydrogen? More of a front runner. The business to invest in though is the one that gets the job of decommissioning and remediation of redundant fossil fuel infrastructure.
Biofuels will grow, but only for aviation and shipping until the electric and hydrogen alternatives become much more scalable.
Agree mostly about home EV charging but on a road trip its different.
Relatively new sections of the Waikato expressway are an interesting case study on what the future may hold. Regular off ramps to "Service centers" which contain EV charging stations which may or may not belong to the service station, sorry I can't remember but more likely are installed by the likes of https://charge.net.nz/ so charge-net pays for the install and reaps the benefits but they're certainly adjacent to the fuel service station and of course there's a small range of other convenience stores, cafe's and one or two fast food outlets.
I am not so sure anymore just installing a fast charger at the average Z service station in a provincial area is going to be sufficient to attract EV drivers attendance as I think people expect more than just the facilities offered by a Z service station while they wait for their EV's to charge up.
Mrs B and I sometimes stop as these service centers because they're a good place to take a break and usually have a decent café with food and coffee that's vastly better than what you'd get at an average service station.
No matter which way you slice and dice it (even just compared to BP's substantially better food and coffee offer ) Z's stores look tired and dated and its a sunset industry. Jet fuel demand isn't coming screaming back in huge volumes anytime soon either in my opinion.
Long haul or intercity that makes sense, but not in suburbia where 95% of service stations are located.
Well maybe the answer is the mixture running that Aston Martin. Wine and cheese anyone?
Z know. They made quite a fuss in their presso to March 2021 saying they have "margin compression from sharp input cost increases... and margin expansion from sharp input cost decreases". Which is intuitive too. See slide 9 in https://portalvhds1fxb0jchzgjph.blob...20Presentation
Current EV's? who apart from some yuppies put up with the time wasting (no it's not a coffee brake, it's a forced stop because these fancy little jokes don't last the distance) - all the time...and do not tell the courier contractors and truckies they need to change to an EV...they are horrified at such a prospect.
No, the future fuel of convenience is hydrogen and to fill up, service stations, as we know them now will still be needed.
Ah now we know what MR B new car is going to be from his many profitable investments.
LOL...lockdown has been bad for coming up with all sorts of idea's...my trade me watchlist is full of them. I'm worse than a spoilt kid in a candy shop with too much pocket money ;)
Aston Martins are awesome but attract all sorts of attention and some of it isn't good.
Its a really bad look from an ESG perspective rocking up in one of those when 90%+ of other people are really hurting in this Covid pandemic.
Where do you park it that's safe ? Pretty tempting target for seriously disaffected people to vandalize the car.
What's the problem Beagle? - just turn into a evangelical born again christian and you don't need to bother with these sort of moralistic petty views and since Jesus is protecting you and your ride, don't worry about secure parking. Just look at Tamaki as a shining example of "I am on a deserving Special' 👏
Hey Beagle, this sort of talk sounds like you have already sold your ZEL shares;). Lot of the Z stations I have been in around my neck of the woods look very new clean and with good food, but I will not comment on the coffee, as I do not drink it. So all these other tired and dated BP, Caltex, Gull and Mobil etc outlets are also in a sunset industry. The question is, how long does it take for the sun to set on this industry? And why would an Aussi company snatch an ice cream, sorry, be spending $2 billion on a sunset industry? I am sure these outlets will be around for a long long time in one form or another. Long time = long sun set:)
One other thing, got 2 emails from Abby Foote the Chair of Z late last night. Did any other holders of ZEL get similar emails?
what an amazing scene with the Aston Martin in the latest 007 movie !!
Attachment 13098
BP wild bean coffee rocks. Our resident expert guru, now head of shareholders association who knows this industry extremely well told me some interesting information about this sector, (which I am sure he won't mind me sharing) including the average weekly instore purchases at BP sites compared to ZEL...I am going off memory here but I think it was about 3.5 times higher at BP, average across the country. $131K v 35K from vague memory, figures were from a while back.
I still hold in the hope there is a chance of a better offer but I am not holding my breath.
You're right its going to be a long sunset. I don't think anyone thinks otherwise but it is going to be an accelerating trend. Once EV's achieve price parity with regular ICE vehicles the rate of decline will really begin to accelerate. They'll still be selling fuel in the 2040's and 2050's but it won't be anything like the volume now. I think Z put out some graph in their presentation of volume expectations in the years ahead...I'll see if I can find it or maybe someone else will share ?
Thanks to Winner emailing me some research on comparative multiples for other industry players overseas I have reached the preliminary conclusion that 12.4 times EBITDA looks like a pretty fair price to me but I will reserve judgement until we get the independent valuation.
Yes a very long sunset. http://nzx-prod-s7fsd7f98s.s3-websit...302/351087.pdf
http://nzx-prod-s7fsd7f98s.s3-websit...302/351086.pdf
Independent Report will say fair price us $3.55 to $3.90 …..shareholders should accept in other words
Thanks for the info Beagle. Will not have time to read all that, but am also in this for a quick buck. Whatever happens, it doesn't really mater who is the best brand, they will all be foreign owned. The question is, do we take our profit now or wait a couple of months for an extra amount of $ks?