Caltex Australia (CTX) will acquire 302 Mobil service stations for around A$300 million — will require ACCC and FIRB approval which will take a few months.
The Herald Sun reports this morning:
“Caltex, Australia’s largest refiner, said the $300 million acquisition was a good strategic fit and would enable it to become a leading player in the retail fuel sector.
“This is a great platform for growth for us,” managing director and chief executive Des King told journalists during a teleconference today.
“This acquisition will allow us to compete with the major retailers – Coles Express, Woolworths and BP.”
Caltex shares rose on the news and were up 6.6 per cent or 70 cents to $11.30 at 1139 AEST.
Mr King said as Caltex was largely a wholesale fuel seller, not a retailer, the acquisition would give it the retail strength of the leading three retail fuel companies.
The purchase of the service stations from Mobil Oil Australia, a subsidiary of US oil company ExxonMobil Corp, also reflected Caltex’s confidence in the Australian economy, Mr King said.
“We believe the Australian economy will recover,” he said.
He said “2009 is a transition year really and buying off this big American corporation and making them Australian is our belief that the Australian economy will recover.”
Caltex, which employs around 1,000 workers in its retail network, said it is buying the 302 Mobil service station sites as a going concern and expects to employ an extra 1700 workers.
Mr King said Caltex would fund the acquisition from internal sources.
“We had a long term commitment to a strong balance sheet and that enables us to self fund an acquisition without going out to raise any equity,” he said.
Mr King said the acquisition price includes estimates for inventories and other settlement costs that will be finalised on completion.
Mr King said Caltex had no change to its guidance.
“This is a platform for growth,” Mr King said on the teleconference.
“Basically this deal, with be cash neutral over years one and two.”
He said Caltex planned to invest about $180 million capital in the network over the next five years and that it would be a platform to grow the company’s earnings in the retail sector.
Caltex has not provided specific guidance for calendar 2009, but it said in April that it was cautiously optimistic earnings would lift this year.
Mr King said Caltex was still interested in other acquisition opportunities.
“We’re going to get this behind us first, but we’re certainly keen to look at any kind of good opportunities.”
Meanwhile, Mobil said the sale of its retail fuel business will help preserve jobs for workers employed in the business.
The 302 services stations are company owned or leased and are mainly based in the metropolitan areas in eastern Australia.
The sale does not include any other part of ExxonMobil’s Australian operations.
Mobil will continue to operate in the supply, terminaling and wholesale marketing of fuels products in Australia, as well as with its lubricants, petroleum specialties, refining and chemicals businesses.
The transaction is subject to Australian Competition and Consumer Commission (ACCC) and Foreign Investment Review Board (FIRB) review and clearance.
Caltex said it expects the approvals process will take some months to complete.
Woolworths said it was not involved in Caltex’s plan and only heard about the transaction this morning.
Woolworths owns and operates 407 petrol outlets independent of Caltex, although Caltex supplies petrol to Woolworths.
Woolworths and Caltex have an additional 133 alliance sites governed by contractual obligations that are co-branded but owned by Caltex or their franchisees.
“The pump prices for petrol at Woolworths-owned and Caltex alliance sites are controlled by Woolworths,” the retailer said.”
Now we all know that Woolworths are going hell for leather to establish the biggest loyalty card in Australia – in partnership with Qantas. Do we really believe that Caltex will have differential pricing from their Woolworths-branded sites?
It’s another Woolworths way of passing by the ACCC and trying to masquerade as a non-monopolistic organisation.
Pity the poor consumer. The media will do nothing due to Woolies ad dollars. The government will do nothing due to party donations. And, we all get screwed again.
Suddenly, France is even more attractive.
This is what is going to happen to young Kiwi hoons’ cars? Any chance we could make this international law?
Not content to damage the brand during 2008 with mechanical and MBO failures, Qantas management are now adding more fuel to the fire with a $180 surcharge if you want an emergency row seat. Added to this was the announcement that certain routes are stopping First Class due to lack of customers.
I would have thought that Qantas would be encouraging customers instead of penalising the loyal ones – it’s usually the FF’s would go for those seats.
Oh well, Qantas joins the previous world’s favourite airline BA as the ‘downgrade airline’.
Click, click, Easyjet, Virgin Blue.
The true extent of the job losses at News Limited is becoming clearer with details emerging from Queensland which reveal how each of the states will centralise their operations to cut costs.
Under the plan the Queensland company will set up a seven day subbing “hub” to manage the layout, subbing, artwork and on-line services for the Courier Mail, The Sunday Mail and Quest community newspapers.
The plan will mean another twenty artists, sub-editors and production staff will lose their jobs. But as the Queensland scheme is the forerunner for similar plans in every state, the total job losses could be as high as 100.
Courier Mail, Sunday Mail and Quest staff will hold a stop work meeting on Thursday to plan their response. National delegates of the Media Entertainment and Arts Alliance are holding a phone hookup today to swap notes on the extent of the News Limited job cuts and how each state business is implementing them.
The Queensland operation, to be known as “NEWSCentral”, will also produce the national Sunday Travel section which has been handed to Queensland as part of the separate, but related, plan to centralise all of News Limited’s tabloid sections.
It is becoming clearer that centralisation at News Limited means more than just bringing sections together. It is in fact a comprehensive plan to consolidate pretty well anything that can be so that duplication or unnecessary localism is systematically eradicated.
News Limited’s Queensland division is emerging as the front runner in this austerity drive because it has already consolidated its subbing at the Courier Mail so that sections and features are all subbed by the same team. Campbell Reid, the Group Editorial Operations Director, has obviously decided to take this model to the next level. He told staff in a memo on Friday that production will be achieved “more consistently and efficiently than can be achieved with standalone operations.”
News Limited has a long standing aversion to paying redundancies and again it seems that there will be a fight for some staff facing retrenchment, particularly casual staff. Photographers and reporters are not being targeted for redundancies, while production staff will be required to fill in a Personal Information Questionnaire (PIQ) to assess what role they would play in the “NEWSCentral” hub before they will be eligible.
The News Limited structure is looking like a giant set of Olympic rings as the company strives ever onwards in its quest to become leaner, meaner and tighter.
What do you all think about a OD function in Paris in December to coincide with the Springboks vs France at Stade de France? We could meet on the Saturday evening for a get together along with wives/partners and then go to the game on the Sunday. I think it is the first weekend in December but will check. Please drop me an email or leave a comment on the website.
Buried in a Sydney Morning Herald story on the weekend was a disclosure that is bad news for the struggling NSW Government looking for a kick along for its huge Bangaroo property development on the western fringes of the CBD.
The Herald said, in a story about the failure of a newish Sydney ad agency: “The failure by one client, Dubai’s biggest developer, the royal family-backed Nakheel, to pay the agency $1.5 million in fees, escalated the debt. The administrators’ lawyers are looking at what, if any, action can be taken against Nakheel.
“When the agency closed its doors on April 28, 24 staff — down from 55 late last year — were told to collect their belongings and leave, which they did without the previous month’s salary and entitlements. Few, if any, had been aware of the company’s problems, nor of the debts that amounted to $3.4 million, of which $500,000 is owed to staff.”
Nearly half the debt was put down to Nakheel’s failure to pay. Nakheel is headed by former Sydney business man Chris O’Donnell who ran the Investa group here.
Nakheel also has around 10.6% of struggling Sydney based property group, Mirvac, and at one stage was touted as its saviour as Mirvac became trapped in the credit crunch and recession, forcing it to raise cash and cut asset values.
Nakheel is a joint venture partner with Mirvac in a bid to develop Bangaroo. What chance does Nakheel have of developing a huge, multi billion dollar development when it can’t pay a $1.5 million debt in Sydney?
For much of this year Nakheel has been broke, not paying invoices, despite being 53% owned by the Dubai Government, which is in turn controlled by the very rich al-Maktoum family.
Dubai itself is all but broke: the central bank of the United Arab Emirates bailed it out in March when it took up half a $US20 billion five year bond offering launched by the Dubai Government.
A few weeks ago, international media reports said Nakheel itself had been bailed out by the Government by an unspecified amount of money.
“Nakheel, the government-owned developer that built projects such as the Palm Jumeirah Island constructed out of reclaimed land to resemble palm fronds, received funding from the emirate’s $5bn disbursement of funding aiming to help state-linked companies,” the FT reported.
“The announcement sheds light on the way a $10bn bail-out loan to Dubai has been distributed. Dubai, one of seven members of the United Arab Emirates, received the funds from the federal central bank in February.”
“Nakheel, part of the same Dubai World holding group that includes ports operator DP World and investment company Istithmar, initially downplayed the impact of the crisis but has since had to slash staff and postpone landmark projects, including the Trump Tower on Palm Jumeirah.
“The company on Monday confirmed it had received an injection of cash from the government, without revealing the amount, adding that it was restructuring some payment plans with suppliers. Last month, the government said it had loaned $5bn from the $10bn federal loan to help state developers pay outstanding invoices.”
The Trump Tower was one of the two big projects that fell over for Leighton Holdings this year in Dubai (the other was work on the extension of the airport).
If Nakheel and its Sydney mates at Mirvac and Leighton couldn’t see their way clear to paying that $1.5 million debt for the failed Sydney agency the SMH reported on over the weekend, what hope does the NSW Government have of getting money out of them to finance Bangaroo?
Struggling Lend Lease is another Bangaroo contender, but it couldn’t raise enough money to finance the equity it needed for the London Olympics Games Village, so the UK Government is doing that itself and Lend Lease will merely be a contractor.
Preparations are underway for a very serious event.
The first France vs Green and Gold (South Africa/Australia) barbeque test match to be held in Menerbes over the weekend of 30th and 31st May. A serious coin-tossing session was held with Genevieve Nicolai the official in charge.
Representing France: Robert of Montpellier
Representing the Green and Gold: Simon of Cape Town and Melbourne
1. No Hors d’Oeuvres
2. Main course to remain a secret plus accompaniments
3. Dessert / Cheese of choice
4. Judges – Jean-Pierre Nicolai and Thor James
5. On Monday 1st June – we sleep.
The guests have been invited (10 on both days) and due to the small size of Jean-Pierre’s barbeque both rounds are being held at Bastide les Amis.
We hear from Montpellier that Robert has planned something ‘spectacular.’
More to follow……….
Sunday dawned bright and clear. A perfect day for the Isle sur l’Sorgue market. Crooksie was over his jet-lag, had finished arguing about Muslim invasions with one of our prominent villagers and we were ready to tackle the market and a lingering lunch with the Fox-Duncans at Le Petit Jardin.
All was proceeding according to plan but when we arrived at the restaurant, Pappa informed us that his daughter, chef, maitre d’hote, organiser and mainstay of the business was ill.
Well, it all went downhill from there. Mid-way through the afternoon Pappa was serving us 45% proof home-made peach liquor, we had made ‘best friends’ with a Scottish couple and their wheel-chair bound mother and then it was back home to try some of Crooksie’s new Chardonnay.
All fall down. Crooksie was last seen trying to climb the 8cm (yes!) high step into his kitchen. A badly bruised thumb, cuts on knees and arms and a memory-loss head emerged followed by Crooksie on the Monday morning. No morning walk, big head ache, unquenchable thirst for mint chocolate ice cream – that was his Monday!
[A full-recovered Crooksie at Chateauneuf-de-Pape]
Tuesday was the arrival of The Mother and Thor. That evening as we crawled into bed, we were summoned by Thor – your Mother has cut herself on the bedside table. Reconstructive surgey later we repaired to bed.
Wednesday morning saw Mom decide to prune the irises. Well, a large thump later, she was on her derriere, a metal statue on its head and the clippers flung over her head into the garden. “The ground gave way” was the official explanation.
No problem. It’s off to Avignon we go. Walking to the car, Thor decided to make friends with the earth, sliding gracefully down to the car along the newly laid chip pathway.
[Giving thanks for surviving their first day in Provence – Mom and Thor in Notre Dame cathedral in Avignon]
The front entrance wall is complete. Jose and his merry men turned on the after-burners as Thursday was a holiday and completed by Wednesday night.
[Four day long weekend coming up]
[Happy long weekend. Note the letter box placed within the wall – we await the Postmistresses’ comments]
Saturday Crooksie left for Austria and Erica, Susan and Trisha arrived from the USA. E for two weeks! Batten down the hatches folks: anything can – and will – happen.
Lovonne and Simon
British Prime Minister Gordon Brown does not have much to laugh about. The headlines for him seem to just get worse. After a week of scandalous stories about MPs rorting their expenses, he has been confronted to a new twist in the global financial crisis saga. One of those dreaded ratings agencies is threatening to take away the United Kingdom’s AAA credit rating and the coverage, like this from the finance pages of the London Daily Telegraph, is not a pleasant read.