Z Energy has attracted the interest of Gull's owner, ASX-listed Ampol. Photo / NZME
Z Energy has attracted the interest of Gull's owner, ASX-listed Ampol. Photo / NZME
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 periodwith 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.
ASX-listed Ampol owns and operates the Gull fuel distribution business in New Zealand.
"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.
While Air New Zealand shares have been rallying in recent days - this week hitting their highest level since April - analysts continue to mark the company down.
In a note titled "defying Newton", Forsyth Barr analysts Andy Bowley and Matt Norland warned that the airline's losses were deepening as the Delta outbreak dragged on.
Cutting the target price on the shares by 10c to $1.15, Forsyth Barr warned that the airline was likely to run at significantly reduced capacity compared to before Covid, due to ongoing restrictions in Auckland, the risk of such restrictions spreading and "zero chance of the transtasman bubble re-emerging in 2021".
Analysts continue to mark Air New Zealand down. Photo / NZME
The note described Air New Zealand's share price as "stubbornly resistant to its current economic reality", with cash burn continuing until 2023 and the company's net asset value (NAV) expected to fall to 54c per share next year.
Forsyth Barr has long said it believes Air New Zealand's loyalty scheme is worth about 60c a share.
While the analysts do not say so, the calculation implies that its businesses collecting rewards and offering credit cards may be worth more to investors than the part of the business that, well, flies the planes.
NZ outperforms
The local sharemarket gained 4.9 per cent over the September quarter, bringing the 12-month return for the S&P/NZX50 Index to 13 per cent to September, Forsyth Barr said.
The index put on an 0.4 per cent gain over the month.
Over the quarter, large-caps, mid-caps and small-caps all provided positive returns, rising 5.1 per cent, 4.9 per cent and 3.0 per cent respectively. The strongest sector over the quarter was energy, up 25.1 per cent.
The month of September finished with 27 positive returns and 23 negative returns and an overall range of 25.2 per cent.
Top performers for the month included Kathmandu, up 16.9 per cent; Sanford, up 14.6 per cent; Synlait Milk, up 12.7 per cent; while Trustpower was down 8.3 per cent, GMT fell by 6.7 per cent and Vital Healthcare, down 6.5 per cent, performed the worst.
The main positive contributors to the index were Auckland Airport, Infratil and a2 Milk. Fisher & Paykel Healthcare, Fletcher Building and Meridian provided the largest negative contributions for the month.
CO2 in the air
NZX-listed Carbon Fund units have followed the upward trajectory of carbon markets here and around the world.
The fund aims to provide investors with a total return exposure to movements in the price of carbon credits and has the ability to buy those credits in emissions trading schemes in New Zealand and offshore.
The units last traded at $1.98, having gained 60 per cent over the last 12 months.
On the carbon market, Emissions Trading Scheme carbon units have been trading at $64.5 - having doubled in just over a year - reflecting strong demand from carbon emitters.
Bega for Fonterra?
Australia's Bega Cheese is being touted as a possible contender for Fonterra's business across the Tasman.
A report in The Australian said brokers at Bell Potter believe cost savings could be material for Bega if it bought Fonterra Australia's operations.
Fonterra said last month that it was considering a float of its Australian operations and said it had its Soprole business in Chile up for sale, thereby allowing the co-op to focus on its New Zealand milk business.
NTL's trading halt
The NZX's regulatory arm, NZ Regco, has put New Talisman Gold Mines into a trading halt at the request of the company.
New Talisman had sought a trading halt while it holds a board meeting to "discuss a number of matters unexpectedly in front of the company, which may have a bearing on the company's intended rights offer," NZ Regco said.
The company is the throes of buying of the Broken Hills goldmine near Tairua.
The final purchase price was $750,000, comprising $350,000 cash and $400,000 in NTL shares at a price of $0.005 per share.
The rights issue to fund the purchase is scheduled to close on October 19.
