Ampol shows its hand again in a final attempt to acquire the New Zealand fuel company.
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The Z Energy Ltd (ASX: ZEL) share price is gaining ground to start the week’s trading and is now changing hands at $3.415 apiece.
That’s a 6.06% gain from the New Zealand fuel company’s previous closing price of $3.22 per share on Friday.
Z Energy’s shares are on the move after it announced it had entered into an acquisition agreement with Aussie fuel giant Ampol Ltd (ASX: ALD).
Read on for more details.
What did Z Energy announce?
Z Energy advised that it has entered into a binding scheme implementation agreement with Ampol. It is proposed that Ampol acquires Z Energy on a cash consideration of NZ$3.78 per share.
Z Energy’s board has unanimously recommended shareholders vote in favour of the scheme.
It appears Ampol considers Z Energy a nice tuck in to its portfolio, given it has made several revisions to its original offer.
The agreement follows an announcement Z Energy made in August that it had received an offer from Ampol to acquire all of its shares after previous failed negotiations at NZ$3.35, $3.50 and $3.60 per share.
As The Motley Fool reported earlier today, in its reasoning for the latest offer, Ampol believes the acquisition could be “double-digit earnings per share accretive, and +20% free cash flow accretive in 2023”.
As such, Z Energy has appointed an independent advisor to assess whether the updated deal is in the best interests of its shareholders and hasn’t ruled out accepting higher offers from rival bidders.
The deal also stipulates that Z Energy will still be entitled to pay dividends on the company’s FY22 performance “during the period up to the implementation of the scheme”.
If the interim distribution of NZ$0.05 per share is made by Z Energy, the deal then represents a value of NZ$3.83/share, according to the company’s announcement.
In AUD, this represents an approximate 23 cents or 7% premium to the current Z Energy price and a 13% premium to its closing price on Friday.
The deal is expected to finalise in the first half of 2022, if and when all regulatory approvals have been obtained, according to the company.
Z Energy share price snapshot
The Z Energy share price has wobbled this year to date but has managed to climb 14% into the green since January 1.
This extends its gains in the past year to more than 35%. That’s ahead of the S&P/ASX 200 Index (ASX: XJO)’s return of about 25% in the last 12 months.
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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.