ASX-listed Ampol has agreed to sell discount petrol retailer Gull to Sydney-based private equity firm Allegro Funds for $572 million, clearing an obstacle for its takeover of dominant chain, Z Energy.
The Australian fuels company today said it had signed a binding agreement with Allegro for $509m in cash, with the private equity firm taking on $63m of leases and other debts. The deal includes a five-year supply agreement with Gull, subject to annual price reviews and termination rights.
ASB Bank and US private equity firm Ares Capital will finance Allegro’s acquisition, which needs regulatory signoff by the Commerce Commission and Overseas Investment Office. The deal is also subject to Ampol closing its $1.97 billion takeover of Z Energy.
“Ampol committed to divest Gull in full to ensure any potential competition law issues were fully addressed as part of its application to the NZCC (Commerce Commission) for approval to acquire Z Energy,” the Australian company said in a statement to the ASX.
The integrated fuels company initially planned to sell Gull through an initial public offering but ditched the idea due to the regulator’s doubts over the deal.
Gull’s valuation – including debt – is north of the $480m-to-$560m range industry estimates put on the discount retailer, based on a valuation ratio of eight or nine times earnings.
Dave Bodger, Gull's general manager, said the new owners won’t change the retailer’s core values.
“We will aim to keep prices low, keep the oil giants honest, and unlike the big guys, we’ll just keep things simple including our offices and overheads,” Bodger said.
“That way, we’ll still keep on delivering the ‘Gull Effect’ and deliver value for customers which is the best differentiator from the others.”
